in 2007, the commission to reduce the guideline penalties for crack cocaine offenses by two levels to signal the commission also concerned that crack penalties were ttoo hi. -- too high. devin that process, involving -- during that process, there were 604 petitions from prisoners who had high public safety risks. they were rejected. half of the denials were in the highest criminal history categories. the rights of prisoners released early were in the day little lower than those released under their initiallly posed a sentence. while annie recidivism is

unacceptable, the ex -- the risk is that again because judges have the right to reject any prisoners that post to high public safety risk. those prisoners who have disciplinary problems in prison, for example. the commission recognizes the need for finality and punishment and those are important goals. we know that retroactivity should be rare. we heard concerns in the united states attorney's office, deep felt concerns and from some senators and congressmen about the resources needed to implement retroactivity. we appreciate and acknowledge those concerns raised about the use of resources particularly in this setup economy. the commission heard testimony that retroactive application of the 2007 amendment which involved a much larger pool of potentially eligible offenders did not overly burdene for tax the criminal justice resources. i was that of my liaison team in

boston and i can say that from personal experience. the testimony received by the commission and my own experience suggests the process went extremely smoothly partly because of the dedicated or largely because of the dedicated work of the u.s. assistant district attorney and assistant public defenders and panel attorneys and the commission and a hard-working judges and probation officers. the commission is confident that the amendment will proceed similarly. we believe the clarity of our policy statement, the commission training, and our past experience will insure minimal disruption this time. >> we are leaving this event at this point. they are voting 6-0 in favor of making new federal crack cocaine sentencing guidelines retroacted and reducing sentences. sentences we're live at the national press club for remarks from nasa administrator charles bolden. this is space shuttle commander

mark kelly who is the husband of congresswomen gabrielle giffords. he will be talking about what is ahead for nasa. >> melissa charbonneau is the effective speaker's chair gets things going for the speaker's committee. lee perriman is the director of enps, an organizer of the luncheon today. he has organized two lunches and very short amount of time and we're extremely grateful for your work. lauri garver is deputy nasa administrator babcock 3. . chris chambers -- mark brender -- former vice

president of communications at goi. [applause] today's newsmaker luncheon is not just about administrator charlie bolton but also about the future of nasa. it is about his vision forand some daunting and budgetary realities and how he will deliver. headquartered here in the nation's capital with more than 18,000 employees, many more working as contractors, nasa also runs 10 field centers, seven test and research facilities, and boasts of global leadership through a variety of strategic, domestic and international relationships. nasa has a rich history of unique scientific and technological achievements. the most visible -- visible

projects have been the space shuttle missions for the past three decades. the shuttle program is now ending. critics have been skeptical of what nasa will or might become. our speaker insists there is no retreat from leadership in human spaceflight but a shift to doing even more more affordably and building on nasa strike and working with the private sector and partners. it is important to understand what makes our speaker tick and how limited to the top of our nation's space agency. in just two weeks, he will begin his third year as the 12th of nasa administrator and we will watch him watch the final space shuttle launch one week from today. he is a retired major general and he was in for 34 years. he was named administrator by the president in 2009. in 2002, president george w. bush tried unsuccessfully to name in the space agency's

deputy administrator. the pentagon insisted he was too valuable to them, and a brief preview of his career may explain why. born and raised in columbia, south carolina, his parents were educators. his staff helps save this -- say this helps explain a drive to inspire young people his father served in the army during world war two and taught history and coached football. our guest occurs naturally involved in sports while his mother kept her son interested in the community and academics. it was to meet his future bride when he was 3 years old. their parents had been classmates and a mother and father were also local educators. in high school, he was the water boy for his father's football team. that is good practice for working in washington [laughter] he was also the trainer, manager, and backup quarterback. he saved a game in 1963. he grew up believing he could do anything with hard work.

he set aside on a point to the naval academy, something that was not in the cards in the segregationist south. unable to get a recommendation, he wrote vice-president johnson but was told to write back when he was older. after president kennedy was assassinated and johnson became president, he wrote again in two weeks later a navy recruiter knocked in his door and the rest is history. at the naval academy, he was elected president of his classic graduated in 1968 and was commissioned as a second lieutenant in the marines and later was a naval aviator stationed in thailand and the more than if 100 sorties over vietnam, laos and cambodia. stationed in california, he served in a variety of positions in the marines and earned master's from usc in 1977. it is assigned to the naval test pilot school where he completed training in 1979. one of our speakers mentors was ron mcnair killed in the challenger disaster. he convinced him to apply to the

after not corporate in 1980, he selected -- nasa selected our guests bigger as an astronaut candidate. in 1981 he qualified as only one of eight marines in the shuttle program and the first african- american marine to become an astronaut. he flew four shuttle missions between 1986-1994. this first including representative bill nelson of florida as a congressional observer. others included commission that the plug the hubble space telescope. many important asset anassignmet ended. in 1997, he was named deputy commanding general of the first marine expeditionary force in the pacific. in 1998, he served as commanding general to the 1st marine force forward in support of operation desert thunder in kuwait. in 1998, he was promoted to major general and named deputy commander of u.s. forces in japan.

is served as commanding general of the third marine aircraft station andir st10 air retired in 2003. his military decorations include the defense superiority metal and distinguished flying cross and was inducted into u.s. astronaut hall of fame in 2006. he and his wife have two children, a son who is a marine corps lieutenant-colonel and a daughter who is a medical doctor and he is a proud grandfather. please give a warm and national press club welcome to a man who has worn many hats including a, or two and earned his stripes in the process, nasa administrator charles bolton. [applause] >> thank you very much for that introduction. i can tell that my mother was looking down on us from heaven right now wrote it for you [laughter] . she would love that. i don't believe much of it. it is an honor for me to be here with you today.

to say i am humbled is to put it mildly. looking out on this audience and recognize and all of you who are here, is just a very humbling feeling to be here. to have this opportunity to represent what i think are one of the two most incredible organizations on the face of the earth right now is nasa and the other is the united states marine corps. i'm especially proud to represent the nasa team and joined by my deputy lloyd garver who is a long time space enthusiast. she ran the national space society for a while. she is probably more of a space buffs than i am. she has a son who is 16 named michel was a football player. he is a good football player. i was a lousy football player who just was blessed to have my

starting quarterback go down so i could get in the game. i could not throw. i could not run. i was a heady quarterback in my starting quarterback was injured, my father looks down the bench and saw me and i could see his heart starts to pound. [laughter] he called me up and tell me to go in. he told me not to throw the football. [laughter] it was on the evening of the day that president kennedy was assassinated. for me, it was a day that i shall long remember. it was a dark evening especially to be playing for the state championship in south when he sent me in and said don't for the ball, i went in and did my best. as the game was winding down, my best friend came in with a play from the sidelines and the play was 88 left. that is a past life. i look to the bench that my dad

and i knew that gary had made this up because he was a tight end [laughter] i figured he can and called his own plight. i looked to my dad and he said yes. i call polite and faded back and through this wobbly pass and a good thing was that there was a really good tight end at a man is to catch the ball in the hands of and we won the game. i became a local hero if only for a moment. that is my story of football. mitch is a much better quarterback. i call him my adopted son or godson because i am really impressed with his ability. also with us on monday amazing group of astronauts who made a special program what it is today is captain mark kelly. mark is a dear friend and probably more important, but is the husband of a dear friend,

congresswoman gabrielle giffords. the chief of staff is here and pia may give to me some time ago when i visited gaby in the hospital. when asked what these things are that i wear. band. my 'i love gabby' it has now become even more special because in a trip to europe in the last couple of weeks, we have an opportunity to have an audience with the pope and the pope blessed the best. i count it as special for me. mark has already been introduced and you know what he has done. i want to thank you very much for your dedication and what you have done for nasa and the nation. it was very special, something you did not have to do and i understand the sacrifice you went through. i am pleased you're with us today. [applause]

it goes without saying that our contingent present our continuing thoughts and prayers are with gabby. we watch her ongoing a miraculously recovery and we pray that that continues. one week from today, nasa will launch its final space shuttle mission. we will be turning the page and remarkable. and then america's history and beginning the next chapter in our extraordinary story of exploration. from the early exploits of daniel boone, lewis and clark, and robert parry, to the break returns of alan shepard and john glenn, americans have always been a curious people. we're bold enough to imagine the world's, ingenious enough to chart a course to them, and courageous enough to go for it. the gifts of knowledge and innovation that we have brought back from the unknown have played their part and the building of a more perfect

union. some say are final shuttle mission marked the end of america's 50-year dominance in human space flight. as a former astronaut and the current nasa administrator, i am here to tell you that american leadership in space will continue for at least the next half century because we have laid the foundation for success. for us at nasa, failure is not an option. we have the opportunity to raise the bar. we will demonstrate in human beings can do if we are challenged and inspired to reach for something just out of our grasp but not out of our sites. president obama has given us a mission to focus again on the big picture of the exploration and the crucial research and development that will be required for us to move beyond it or bad. he has charged as the carrying out the inspiring missions but only nasa can do which will take us farther than we have ever

been, to orbit mars and a dead man's land on it. he has as to start planning a mission to an asteroid and right now, our don space craft is approaching one of the biggest in the solar system, vesta and we are scheduled to drop into orbit around that asteroid this month. what it finds out could help inform such a future mission to an asteroid. the president is asking us to harness that american spirit of innovation, the drive to solve problems and create capabilities that is so embedded in our story and has led us to the mon, to great observatories, and two humans living and working in space, possibly indefinitely. that american ingenuity is alive and well. it will fire up our economy and help us create and when the future. -- and when the future. only if we put aside our differences and work hard and dream big, and imagine and was possibilities. the space shuttle is an amazing

vehicle. the incredible program it pioneered has taught us many things, and helped make tomorrows exploration possible. every shuttle mission has showcased the amazing talents and expertise of each of our astronauts in robotics and science. each mission was different. each was exceptional and challenging and expanded our capabilities as a nation and the world. the atlantis destination next week, the international space station, is the centerpiece of our human space flight activities for the coming decade. with almost 1 million pounds of hardware clock measuring over the length of a football field and with an interior volume > i 747 aircraft, traveling at 17,000 miles per hour around the earth, 16 times every normal earth day, it is occupied by an

international crew of sex, actively participating in over 100 research investigations at any given time. and a little over a decade, the iss has expanded our knowledge of living and working in space and has become one of the most important beacons of international cooperation as orbit our earth. the station is the pinnacle of our current achievements. it is a stepping stone to the rest of the solar system and the tip of what comes next. the shuttle allowed us to build and support the station and the orbiting outpost research capabilities are unprecedented. the station has housed more than 1200 experiment to date. it supports more than 1600 scientists representing 59 countries worldwide. every research investigation in all the systems that keep the iss operational out -- teaches have to explore for their fur

from our planet and improve life here. studies from our boys refund increased respond to environmental make sure we can live and work successfully as we travel farther from work and better understand the impact of medical conditions encountered in space and here on earth. solar power and water processing are two examples of how we learn to better operate spacecraft independent of resources applied for murder. we need to break the ties to our home planet and learn to live and work in space without direct dependence on earth. the iss can be a platform to learn the skills. technology demonstrations on the iss will support future emissions and improve the reliability of future life- support systems. all the many other things we will need to understand in depth to really become a people who can safely reach our destination when i hear people

listen to the media reports and they say that the final shuttle flight marks the end of u.s. human space flight, i have to tell you -- you almost living on another planet. [laughter] we are not ending human space flight. we are recommending ourselves to it and taking necessary and difficult steps today to ensure america's pre-eminence in human space exploration for years to come. we have to do things differently. for one, we have to get out of the business of owning and operating lower orbit transportation systems and hand off to the private sector. when to exercise sufficient oversight to ensure safety of our astronauts. we need to focus on deep space exploration while empowering today's and abettors an entrepreneur is to carry out the rest. this new approach to getting our crews in part of into warburg will create good jobs and expand opportunities to the american economy.

let me be crystal clear about this -- i believe -- i believe that american companies and their spacecraft should send our astronauts to the international space station rather than continuing to outsource this work to foreign governments. that is what this administration is committed to and that is what we are going to do. along with supporting this iss and commercial crew transportation, we will pursue a deep space crew vehicle and an evolving heavy lift rocket. we will make the technology investments required to begin the year of deep space exploration today. our destinations for human beings beyond earth remains ambitious. they include the moon, after riots, and mars. our investments and the systems, and research will

prioritize a logical sequence of future human exploration missions and 40 tighter bond between robotic and human exploration. the debate is not if we are going to explore. , but how we will do it. not if there will be human space flight, but the right path to the next generation of systems. the shuttle is an expensive system to maintain. it has served us well, incredibly well, but now is the term to cut the cost of transportation to lower ore and foster the american aerospace base and it's amazing potential to become a job-creating engine for decades to come. the 21st century mission will focus on the transportation systems that will carry us beyond where we have been, to new destinations and new milestones in the annals of human history. we are one week from a very important spaceflight milestone but far, far from the final one. we celebrate the shuttle bus 30

years of success which is longer than any other human spaceflight program. the shuttle has expanded our picture of what it means to be an astronaut and we salute the hundreds of men and women who have carried out the programs missions. both in space and on the ground. we also remember the hard lessons that have helped us to continually improve safety. we shall always remember the challengerts-51l and columbia who made the ultimate sacrifice. i spent 14 years at nasa before leaving and returning to head the agency. some of the people i respect most in the world are my fellow astronauts. some of my best friend died flying on the shuttle. i am not about to let human spaceflight go away on my watch. i'm not going to let it flounder because we pursued a path that we could not sustain.

it is vital that we keep exploring not only so we can learn to live and work other places and find out what it means for us as the human race but also so the benefits of that exploration continued to return to earth. we keep generating new knowledge about our planet and universe and new solutions to the challenges our planet faces on many levels. president obama has quit nasa and several other technology- focused agencies at the forefront of innovation for our country. we are pleased to be an essential part of this national focus on research and development which will greatly improve our future and give coming generations more choices in how they face planetary challenges and seek knowledge about the universe beyond. we will maintain and grow u.s. leadership in space and derive all the benefits that flow from it. tomorrow's space program is

taking shape right now. earlier this year, i made a decision to base the new multi- purpose crew vehicles ormpcv on the original work we have done on the overall encapsule. the spacecraft will carry four astronauts 421-day missions and be able to land in the pacific ocean. how is designed to be much safer during ascent and entry than the shuttle. we're nearing a decision on a heavy lift rocket, the space launch system, forsls and we will announce that soon. complement by technology development, these two systems will open up the entire solar system to us. i have established program offices for bothmpcv and sls at the johnson space center in houston and hawksbill, alabama respectively. i have established our crew at the kennedy space center and will work on upgrading the launch facilities.

we will accommodate more kinds of users. speaking of those facilities across the agency, we have had a tremendous interest from our commercial space partners in reusing releasing these assets. we're close to making some major announcements about them soon. the reuse of our unique nasa assets like the orbiter processing facilities will help these companies keep their costs down and create jobs for the space industry of tomorrow. the mid-atlantic regional is taking shape our plight facility in virginia. while the first customers will be the orbital corporation. last week, we issued a call for proposals from mission concepts studies of a solar electric assault -- propulsion system demonstration. that is what the many technologies we need to advance and validate as the sea to reach those farther destinations. consider how the architectural options for human exploration of our solar system will change as

we develop space technologies for which there is wide consensus that we need. better in state -- and space propulsion, refueling depots on orbit, inflatable habitats, high reliability life-support systems, high bandwidth communications at, adaptive avionics, radiation protection, integrated human and robotic systems, and precision navigation. our partners in the commercial orgel transportation services program continue to meet milestones. the new participants in the second round of our commercial crew have met their first set of milestones required by nasa had are on a path for continued success. recently, my dear lauri garver have visited our partners who are working diligently the

systems that are developing are amazing. the energy and ideas in the field are palpable. all of this in the early days of our push into the next chapter of human space flight. in addition to this human -- to our human spaceflight progress, we have a large number of amazing science missions coming up. in the next six months, we will launchjuno to jupiter. we put the don satellites into orbit around a giant asteroid in the main asteroid belt for the first time later this month. in september, we launch a gr winail probes -- we law t we launch the twin grail probes. we will peer deeper into the universe. at the same time, we will advance aeronautics research in

partnership with other agencies and the aircraft industry. to create a safer and more environmentally friendly and efficient air travel network call nextgen. the aerospace field faces many significant challenges but challenges can also serve as catalysts for innovation. have to dou we will develop new ways of doing business for the zero ryan government and industry team has shown exceptional creativity in finding ways to keep costs down through new management techniques, technical solutions, and innovation. at this historic moment, america is leading once again by making hard choices that will define the an usew. \ we're taking the bold actions because that is what we need to do to create and win the future. thanks to the many achievements of nasa and its partners, the brave and talented men and women who have soared into space and developed so many cutting edge

science missions, we now have a strong foundation from which to pursue these larger goals. the show gave us tremendous insight on how humans can live, travel, and work in space. because of the shuttle, a we haveiss which is giving us the breakers in human health research that will help us reach and return from those new destinations and inspire the next generation of leaders. we have choices today -- do we want to keep repeating ourselves or do we want to look at the big horizon and to inspirational things we have already challenged ourselves to do. my generation to the moon. iss and today nasa wants to touch an asteroid and send humans to mars. nasa is moving forward in making change because the status quo is no longer acceptable. when the future generations to be able to do more than we can

to that. the students and early career scientists and engineers i speak to around the world have a ton of energy and enthusiasm. they are excited about the chance to do something new and be on the ground floor of the next big frontier of human exploration. i want to but they're baked ideas into practice and they should. if you're studying in a discipline today, you'll have a great career ahead of you. it is not just that nasa but other government agencies or in private industry or academia. when that final shuttle landing occurs and the cheers and tears subside, we will keep on moving toward where we want to go next. your kids and my grandkids, they will do things that today we can barely dreamed of. our nation has made great progress throughout its history by innovating solutions to meet grand challenges.

, to build an intercontinental road, or landham @ moon and return safely to earth. this created new technologies and innovation along the way. these achievements inspired generations to pursue challenging goals, created new industries, and ultimately improve our country and our world. 50 years ago, a young president gave nasa a grand challenge -- one chosen not for its simplicity but for its audacity. "to best measure and organize our collective energies and skills." in accounting that goal, nasa not only defined america, it made a lasting imprint on the economic national security and geopolitical landscape of our times. today, we have another young president, barack obama, who has

outlined an urgent national need to out-innovate, out-educate, and out-build our competitors. and create new capabilities that will take us farther into the solar system and help us learn even more about our place in it. president obama not only honors the kennedy space legacy but also, again, challenges this nation with his vision for the next era of exploration. let me tell you, nasa is ready for the grand challenge. thank you all for blessing me by allowing me to be here. i will take questions, i guess. [applause] >> thank you, administrator. we have a lot of questions coming from the audience area.

we want to give captain kelley an opportunity to speak before the top of the hour. i want to talk about the environment we are now operating in in washington. the news of the day involves the budgetary reality. it seems as if right now there are a lot of wheels in motion there seems to be a lot of risk to the federal funding environment. the white house and congress are trying to come to terms with an agreement avoiding a rather dangerous debt ceiling deadline. we have a short-term problem and we have a long-term problem. can you talk about the risk to the work you're talking about in the short term as well as the sec intermediate or longer-term because of this problem alone? >> as i have tried to say in my remarks, america is the foremost

leader in space exploration. there is no question about that. when i talk to my international partners, they acknowledged that. we will explore and we have said on a course where we will explore even farther into deep space. our focus right now is to safely fly out the shuttle program was started some six years ago with a very well-organized transition plan. markell the next the last mission and will launchscs-135 next week and bring it safely back to earth and effectively close out the space shuttle program. we have the 2010 authorization act produced by a bipartisan vote of congress and signed into law by the president and formulated or supported with a full year cr that provides our funding. through boat -- through bipartisan action the elements

of that act, i talked about my comments. i am very confident that in spite of all else around us, our future is bright. it is most important that america remain the leader. our primary focus after the shuttle will be to make sure that we have a viable, domestic space industry so we don't have to rely on international partners to get us to and from the international space station. >> it seemed as of the cause of the budgetary environment we are encouraged that there is a general acceptance of the idea that we need to hand off a good deal of this work to the private sector. in an environment where the rest seems to be rising and essentially america cannot afford a lot of things, is the risk of growing that the government cannot be as much in the business of space in the future? >> i want to remind everybody that our turn to him rely on

commercial entities for providing access to lower orbits started long before the present economic crisis. a national space act of 1958 which established nasa said to the greatest extent possible, use commercially-viable companies to achieve your goals. the previous administration after the columbia accident said we need to bring about a viable commercial space industry so that nasa can be about exploration variant everyone has always known that owning and operating a lower orbit transportation system is not in the best interest of the nation. it detracts in the ability of our industry to grow and run that particular aspect of space flight. this did not start as a result of the crisis and it is not a response to our financial crisis. this is the smart thing to do. >> what about at the moment?

>> why first became the nasa administrator, my pledge was maintained -- was to maintain the safety. i want to maintain the safety of crews operate on the international space station and that has not changed. we will safely fly out the shuttle and safely operate the station and safely operate or oversee the operation of the commercial space entities. i am very confident that will be done well. if you look at any of the major companies today whether they are under an oral or otherwise, in many of them, you'll see faces familiar to you. they will be former astronauts who are now in executive positions. spacex has a few former nasa folks. i am very comforted and confident that safety will not be compromised. we have nasa engineers, scientists, flight directors,

and flight controllers who are now transitioning to the new of arena for access to lower orbit. >> we have had some of our space heroes testify on capitol hill. they said that they think the national security is innately tied to the nation's space program. they say there's a certain level of uncomfortableness with doing business with international partners to some degree. to what degree can you recognize the ability -- the validity of the passionate argument they make? >> i consider everybody personal friends and i have the utmost respect for them. some of them are mentors and

heroes but i respectfully disagree with the positions they have taken because we are doing things that are in the national interest that will insure our national security by producing -- by facilitating the success of a viable commercial space industry for this nation. we'll grow our technology and jobs. i think everyone will admit that what is most important to the nation today is increasing our technological work force and ensuring our people of places to work, and the space program that president obama and visions and it is my task to carry out with the help of our nasa contractors and civil servants is a viable and vibrant commercial use to get to lower orbit while we explore. when i flew the hubble space telescope mission, i don't anybody imagined what it would do to change our world and our perspective on the universe. without shovel, hubble would not be in existence today.

it would not be writing the text books on planetary science and other things of that nature. we will continue to do that. i was with some congressional intern's earlier in my class than if anybody had had a parent or relative had to go to the hospital in and ems vehicle and several than said they had. i s to that struck you as strange that the doctor know everything about their vital signs and new exactly where to put them? that was not planned that way. it happens because we decided following president kennedy that we were going to send human to themoon and we realize that a quarter of a million miles is far away and we don't have that much cable. we had to have find ways to find out our astronauts are doing. wireless communication and

instrumentation develops. it was not because we knew we needed it but because of necessity. that is what space exploration does. that is what is so important that i be able to carry out president obama's vision for increasing the amount of technological development we do in this nation. it is vital for our national security. i would say don't be fooled by anybody who says that space is not important and the things we do are not important. they are vital for our national security and. >> you mentioned earlier that orbital science andspacex are the partners you have now. since there is a great deal of hinterland between defense contractor and the space business, how do you guard against transfer of some of this technology to governments that might be hostile to us? >> i don't have a real problem with that. there are lots of laws that help me make sure i don't do that.

if i go back to how we will explore -- you may have mentioned that we will be awhile without being able to do things in space and that is not entirely accurate. those two entities in less than one year will be providing under contract for us access to low- earth orbit and access to card the criticato cargo. we don't want to rely on international entities and there will be certain things we can do domestically that take care of national security interests. growing international partnership and expanding our international outrage is critical. is a vital part of our national security policy. we need to have our on domestic capabilities used in times where it is critical for us to do

things alone. >> realistically, how soon you think a commercial company will be flying astronauts? how would you feel about flying commercial? [laughter] when we asked the commercial entities how long it will take, about three years after we let the first contractor in. we should have a viable commercial capability to take humans to space. i think that is correct and some say it will be even shorter. we say about three years. roughly, 2015. what do i think about commercial for an active astronaut? i would not be standing here touting it if i was now willing to go get on it. people ask me if i would fly a given the opportunity and i was they don't tell my wife but in a heartbeat.

[laughter] [applause] if someone had the money and is apparent some people have the money to buy a ticket to space, there are efforts to facilitate that with the enterprise by sir richard branson. when you see that opportunity happening by more progressive basis. ? >> we are very, very close to having the capability to do sub-orbital flight. it is the type of operation that sir richard branson wants to do where scientists and plain people who want to experience space flight have an opportunity to launch and do like -- is a repeat of the allen sheppard first flight into space. someone will get to fly and then

view of our planet. i think that is around a corner. it will not be that many years away and not within one couple of years. >> considering the number of expeditions to the international space station each year, what is the future of the astronaut corps and how you attract, motivate, and retain those who would be attracted? >> i don't have any problem attracting people to the astronaut corps. i have a problem warding them off and selecting out of the thousands that apply. america is the leading nation in terms of exploration and that attracts young men and women. the fact that they can see there is a real possibility that they can go to very sen because we are not leaving space and we're occupying the international space station until 2015 or beyond.

we can get them there and we will get them there. the fact that they see that we're trying to get a viable commercial entity in place means that even more people have an opportunity to venture into space. there are many things we are doing to attract young people to follow in my footsteps. i am hoping we led many more do that. >> we have a member of the astronaut corps like to make a statement. >> mark kelly needs no introduction he has become quite a figure after deciding that he was going to split his time, if you will. he is an incredible hulk and and father and an even more incredible commander for space shuttle missions. he's a veteran of four flights and was the commander forsts-134 which was the last flight of endeavor. if you come forward and give us

a message -- [applause] >> good afternoon, everybody. it is great to be here and it is good to see some familiar faces in the audience. i appreciate the kind words from generalbolden about the time i have spent at nasa. it has been a tremendous honor to be an astronaut and to follow in the footsteps of some really great pioneers like alan shepherd, john glenn, neil armstrong, and so many others that have led us into the space age. since i joined nasa 15 years ago, i have been privileged to take four trips into space all for the international space station. and has been an amazing ride. as i what iss fade away into the distance when i last departed them on the 30th of

may, i cannot help but think that what an amazing accomplishment this has all been. american ingenuity and the vision to build a strong international partnership is what made this such a great success. with the addition of the of the magnetic spectrometer which we installed on space station six weeks ago, we now have a completed an incredibly capable laboratory in space. i expect that this new instrument will revolutionize particle physics research and add to the significant discoveries that will certainly be the legacy of the space station program. has anybody hurt amf's? ams was a $2 billion carbon particle detector which we did

not pay for. it was paid by 16 different countries. there are six universities and ball than 600 physicists. ams does what hubble does not do. hubbell has been an amazing tool for astronomers and astrophysicists. it shows us galaxies and how they looked to within 500 million years or a bill or -- or 1 billion years after the big bang. ams will tell us what those things are made up. the way it will do that is in the beginning when the universe was created, there was a lot of hydrogen and helium. we know that. another was a lot of matter. and something comes out of nothing, if there is a positive, there should be a negative.

not only should there have been a lot of matter but there should have been a lot of antimatter. we don't know what happened to be antimatter. we know that matter light atoms of oxygen and nitrogen are created in such as stars. -- inside stars. if it is an anti-oxygen or anti- nitrogen atom, that would be created inside a store, too. if we can detect one particle like that through this detector, then we know it came from something like a star made it antimatter. a lot of those galaxies that we look at with hubble space telescope's and the stars we see out there might actually not be made out of stuff like this. it might be made out of the opposite of that. it is really an exciting time for science on the space station. it will certainly add a lot to the science program. as we continue to live and work

we hope to launch new vehicles, new destinations in and beyond earth's orbit. how exciting will it be to see the next generation of how exciting will that be to have someone visit an astronaut or venture further into our solar system. it will really be something. as we enter into this for the july weekend, i cannot help but reflect on how we have a nation of explorers for over 200 years. it is our responsibility, all of us, to maintain that leadership in the exploration of space. president kennedy told us "our leadership in science and in industry, our hopes for peace and security, our obligations to ourselves as well as others all require us to make this effort.

" many of have the -- many of you have been following the recovery of my wife and is going well and she is sorry she cannot be here today. we're proud of the outgoing support. people are a tremendous source of strength to her but also to me, our family, her friends, and her staff. i love her very much. i also love the space shuttle very much. [laughter] the space shuttle has been very good to this country. it is an incredible ship that is difficult to let go. in one week, the space shuttle will rocket off the planet one last time. how many people have not seen this before? there are a couple of hands and lummis and everyone else has seen a space shuttle flight in person? probably many of you haven't. you have one week to figure it out. [laughter]

i suggest you get down there and do this. charlie and lori can help you with that. [laughter] [applause] as atlanta's head off on its last mission, we can all be a little sad for a little while. that is okay because i will be sad. also know that nasa will open a new and exciting chapter where we will continue to inspire our children and we will be, continued to be a great investment for the american people. as some of you might know, i announce my retirement from the navy and nasa couple of weeks ago. it was great to complete my last flight and the navy and nasa by landing the space shuttle on june 1. it was the highlight of my career. since then, there has been quite a lot of speculation about what my plans are and if i plan to run for public office. it means it must be really slow

summer out there. [laughter] i will go into more detail about that next week when i visit, iowa and new hampshire. [laughter] in all seriousness -- but [laughter] my main focus right now and for the foreseeable future b iagby's recovery and spending more time with my kids. she is the politician and the family and i am the guy and i see no reason to change that now. thank you, folks. [applause] >> we are almost out of time. before i ask the last question, i have a couple of housekeeping matters to take care of. i want to remind you about some of the upcoming ones and speakers. ted leonsis will be our guest

speaker. july 15, tim armstrong, ceo of a well and we will discuss the future of journalism and july 18, j jerryazzco had of the nuclear regulatory commission will join us. if i get asked are both speakers -- it like a best of of our speakers to come up for a moment. for both of you, what was your favorite food in space- [laughter] >> mind is easy. a shrimp cocktail. it was real jumbo shrimp with cocktail sauce and everything. we have used dehydrated food so that is without a doubt my favorite. >> hcharlie still my answer. most people tend to like that.

those cupcakes looks pretty good [laughter] the way we package stuff, they would be smashed down and you would not be able to read the word nasa. we have 400 options of food. i also like the creamed spinach. many of my crew members think it is pretty disgusting. [laughter] >> first of all, for the administrator, our complimentary coffee mug. [laughter] [applause] i said as si garynise yesterday, i noticed short haircuts are all the rage these days. i want to present you both with a complementary national press club baseball cap. [applause] how about a round of applause for our speakers today? thank you. [applause] i would like to thank all of you

for being here and i like to thank the national press club staff including the library and broadcast center for guys in today's event and you could find out more about the national press club at our website at you and get a copy of today's program and www.press.org, thank you and we are adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] [room noise]

[general chatter] [random >> looking ahead to our prime

time programming, at 8:00 eastern we will feature henry kissinger f henryareed zacharia -- the topic is china in the 21st century and it gets underway tonight at 8:00 p.m. eastern right here on c-span. >> c-span launched a new easy to navigate website for politics in the 2012 presidential race. with the latest events from the campaign trail, biographical information on the candidates, twitter feet and facebook updates and links to c-span media partners in the early primary and caucus states. this and us that c-span.org slash campaign 2012. >> to into c-span this independence day. writer michael lind and other panelists will discuss whether the united states can remain united. >> the political level, we are more divided if you look at partisan bullet -- polarization

than any time since the civil war and reconstruction. >> and a talk about religion, violence, and the death penalty. and nixon insiders talk about his foreign policy. monday -- beginning at 10:00 a.m. eastern time. for complete schedules and times, go to c-span.org. >> this -- this fourth of july 3-day weekend on c-span 3, we will visit the smithsonian museum of -- smithsonian museum to talk about an expedition to circumnavigate the globe and a treasure of 40,000 specimens that became the foundation of the smithsonian this petition. first lady laura bush on her time in the white house, planning her husband's presidential library and her memoir. then a panel, including former clinton press secretary mike mccurry, discusses jfk's relationship with the press. it the complete schedule at c- span.org/history.

>> yesterday, a senate homeland security subcommittee on contract oversight looked at afghanistan reconstruction contracts. witnesses include contractors to receive money from the u.s. agency for international development and the army corps of engineers as well as defense department and usaid officials. missouri democratic senator clear ms. castle -- clare mccaskill chaired the two-hour hearing. if the witnesses have become -- i have a formal statement prepared but i have decided not to give a formal opening statement. and just express the reason for this hearing. this is not the first hearing we have had in the subcommittee on

contract thing in our contingency operation. and i began working on this problem almost the day i wrought -- arrived in the senate. when i travel to iraq to do nothing but look at contracting oversight because i couldn't figure out how in the world things had gotten so out of control in terms of contacting in iraq. i went over to iraq and i realized why they had gotten out of control. contract and representatives were just a low man on the total bowl being handed a clipboard -- there was no training. there was not efficient made on sustainability. there were decisions made with almost a myopic look at the mission and not a realistic look at security and sustainability and competency in terms of available personnel to continue whatever the money we were

spending on reconstruction. probably if you look up an example, the initial contract, if you look at an example of everything wrong with contract and, that would be the poster child. people may not remember that the estimates for that contract for the first year were supposed to be under a billion dollars -- the first year of that contract cost our country $20 billion. it is just one example. i want to try to focus today on reconstruction contract. the sad thing about this hearing is i had been hopeful back in 2007 that by this year we would have done of lot to overcome some of the problems in reconstruction contracts in in theater. this hearing does not make me feel good about the progress we have made. there has been some progress but the american people can't afford

this anymore. the president requested $17.3 billion for the construction contracting in afghanistan. now, that is a big no. if the united states of america was humming along. that is a big number if our roads or not crumbling because we don't have the money to fix them. that is a big number if we are not looking at cutting many programs that are essential to the health and welfare of this nation. but in light of the fact of the fiscal problems in this country, that is an enormous number that will go into the country of afghanistan to build roads, to build public structures -- whether they are schools or other public structures -- and i think it has now become an urgent matter for this congress to look seriously at whether or

not that kind of reconstruction money is absolutely essential to our mission in afghanistan. looking at the list -- lessons we have learned in the past, the government has been very slow to apply those lessons. i am not sure the implementation of afghans first is leading to the outcomes that would make any american proud. i am not sure the government and contractors have taken steps necessary to provide transparency and accountability we have to demand in light of the incredible difficult decisions we were faced with in the united states congress in terms of our fiscal picture in this country. we spend $61 billion total on reconstruction and the vast majority has been through contractors. the defense department and u.s.

aid are primarily responsible in part of the problem we will talk about today is no one is totally responsible. there is no one i can really find that once to say i am responsible -- in fact, i would be surprised if i don't hear testimony today from people who say i am not really responsible. it is time somebody is responsible for money spent on roads that will never be sustained and for buildings and electrical power facilities that are built that nobody there knows how to use, much less access the power that supposedly we will provide. it is someone -- time someone to that for to say i am responsible, i am planning the project, i am certifying sustainability. the department of defense is not certified sustainability -- i remember at the beginning we talked about serf.

here is what it was supposed to be. it was supposed to be almost like walking around money. it was supposed to be money used by various units that were on the ground in iraq -- the example i was given, i will never forget. in one of my very first hearings -- senator, one of our sergeants on the ground in the community and he is stabilizing the neighborhood and the window of his store is broken. and we need that sergeant to be able to say to that store owner, i've got the money right here to fix your window. it provides good will and stability and it is the kind of things that wins the hearts and minds. we have gone from broken store windows to hundreds of millions of dollars of construction projects in serf. meanwhile, no one has taken ownership of what is the difference of the responsibilities of aid which

traditionally has done a construction and responsibilities of department of defense, that is now engaged in serious large profits for construction. sustainability will be a key issue and it will be something we are very important we get our arms away. inadequate contract and program managing practice -- will covered that. obviously transparency and insufficient contract personnel, and of the key problem we have not yet dealt with. aren't they getting better training now, contacting representatives and the meat units? yes, they are. i congratulate general -- general caldwell and others who have worked on that. poor integration of interagency effort. i don't think anybody in this room will have a strong argument. continued personnel turnover. we are getting a one-year

turnover on aid right now i know it is probably very difficult to get folks to what to go to afghanistan for two-four years. but if we embrace a constant turnover that we have in theater, we will have bad things happen. the beginning of the project will not have any idea what the end of the project will look like, and vice versa. security challenges obviously remain a big problem. i think we will have to try to dig through all of the problems today. and i will tell you that if we do not get strong, substantive answers that every dime that was spent in afghanistan on reconstruction is being spent wisely and being spent on the kind of oversight we would expect if we were building a highway down the road of the

united states of america, then i it think it is time to focus on a mission where we are training security forces and where we are working to provide stability against the taliban and the kind of structure that we need to support going after al qaeda in pakistan and afghanistan -- that perhaps it is time to shut down $17 billion worth of money going to reconstruction projects when our track record really stings. i hope you all will convince me i am too cynical and angry and frustrated about the way we are spending money in theater. and i want to tell you, i am looking for good news and i hope we hear some today. there are too many people in missouri saying why can we fix this road, and then i look of the projects we are doing in afghanistan and it is very hard to explain to them why we can't fix that the road because we

can't afford it -- yet we can throw money away in afghanistan on projects that were clearly not sustainable. and anybody spend any time thinking about it in the first place we would realize that. that kind of planning has to begin happening and that kind of accountability has to be present. senator portman is here. i will give him a time to get settled. we will continue the hearings and continue to provide oversight in this arena. it is a place we need to draw the countries attention, i think we need to certainly bring the attention of the department of defense and the department of state to these problems, and we need to begin to do one of two things, to do it right or stop doing it to -- and i will turn it over to senator portman for

his opening statement. >> this is an important topic given the resources we are devoting to afghanistan. i had an opportunity to meet not just what some of the brave soldiers and marines but also some of the federal government agencies and some of the contractors. i noticed your committee under your leadership has done some of the most diligent and searching oversight of reconstruction and development over the last several years. again, it is critical work and i am pleased to join you as your ranking member. the hearing is especially timely as it comes on the heels of a major announcement last week concerning the u.s. mission in afghanistan. the president announced his intention to withdraw the full complement of 30,000 so-called surge troops by september of 2012 with the first 10,000 coming out by the end of this

year. some of the clarity regarding the strategic objectives and afghanistan. but what is clear we are now in a critical planning window with respect to our military and our civilian mission. we have 154,000 private contractors working for the defense department. the issue of the effective and efficient use -- a new urgency as we near the surge draw down and also the plan 2014 transition. also a timely timely because of the fiscal problem on our doorstep. our service men and women have done everything they wanted and more and afghanistan. they performed remarkably well.

their extraordinary skill under tough conditions. during the reconstruction efforts in afghanistan, which are incredibly important to sustainability, we want to make sure we are doing is right and make sure we are consolidating on the hard earned gains we achieved. to clear, cold, and build an open the transfer. as we reach the transfer stage in many areas of the country the objective i think has to be to leave behind a more functioning society and economy, governing structure and a stable, more constitutional and stable government in afghanistan. notwithstanding the radical taliban and other elements. one might questions -- and i am sure you will talk about that

and the sustainability of efforts. we invested heavily as americans to achieve the goal to build up afghan petitions since 2002. congress has appropriated $60 billion for relief and reconstruction and afghanistan. the great majority of which has been channeled through private contractors. now we know from bosnia and iraq that a reduction in troop levels does not mean a drop in contract activities. in fact, there has been an increase. in fact, there is a reliance to perform logistical roles. essentially, the contractor presence will also decrease as we move our support of large scale -- off-budget spending to more direct budget aide to the afghan government directly. the strategy must focus now, more than ever, to assure afghans are able to sustain what

we helped to build. we must consider, not only, how many additional schools to construct but also whether afghanistan will have teachers and medical professionals to sustain those institutions. the potential mega-watts output of the power plant but whether there is the research and expertise to manage the long- term operations and maintenance. on a related note, as we encourage afghan firms under the afghan first policy we must consider seriously revamping the process to ensure they do not pose security risk. reconstruction is a critical component of our counter insurgency strategy and reconstruction dollars must never be diverted to support terrorist or uncertain elements. that is one of the concerns i have three this -- as we go through this afghan first policy. we should have no illusions -- afghanistan was able to stand

alone, and once the large-scale mission does conclude, according to a world bank estimate as much as 97% of afghanistan's gdp is currently derived from its spending-related military and donor-community presence. 97% of the gdp. reconstruction efforts must be directed toward and powering afghans to regain responsibility and control over their own future. we have plenty of challenges and i've looked forward to being here today and discussing reconstruction contracts, lessons we learned an ongoing problems. >> thank you, senator portman. if we could have both of our witnesses -- mr. hakki, is it mr. hakki? if you could take a seat. did i pronounce it correctly? hakki -- the "hockey."

that will be easy for me to remember. let me introduce the two witnesses. larry walker is the president of louis berger group, international consulting company that has large contracts with u.s. aid and afghanistan. he is this possible for strategic direction for the firm and in sharing the company had at resources and support for successful completion of its program. he also oversees the development of strategic operating plans for each business unit and receives implementation of companywide initiatives. thank you, mr. walker. mr. hakki is chief executive officer of contract international, in, which holds millions of dollars of contracts with the best -- defense department and afghanistan. he has been responsible for overseeing the operations of the company that the u.s. headquarters office. his response abilities include oversight of u.s. materials procurement, quality control,

shipping logistics' and monitoring the staff of engineers and administrative personnel. mr. hakki holds a master's in structural engineering and has been in construction for over 30 years. i am glad you are both here today and i look forward to your testimony. it is the custom to swear an all witnesses that. before it so if you don't mind, i would like you to stand. raise your right hand -- the use where the testimony you will give us before the subcommittee will be the truth, the whole truth, and nothing but the truth, so help you god? thank you both. mr. walker. >> >> chair mccaskill, senator portman and members of the subcommittee, i am larry walker of the louis berger group. i appreciate the opportunity to give perspectives on the highway project. we are an international

consulting firm of approximately 3000 employees around the world. we provide small multi- disciplinary expertise including engineering, programming construction management and economic development services. many of the projects are carried out in the most fragile and challenging regions. we began working in afghanistan in the 1970's ended december of 2001 the company was the second engineering firm to enter afghanistan after the september 11 attacks. o work has consisted mainly of reconstructing and rehabilitating the physical structure. we successfully reconstructed more than 2,000 kilometers of paved roads, added more than 40,000 jobs to afghans and trained thousands more. state-funded projects have irrigated more than -- acres of land and construct a more than 90 schools and clinics. improved road network as dramatically decrease transit times, which spurred economic development along rural corridors and improved access to education and health care. i traveled these roads myself

and eventually save the work has improved the quality of life and death in -- and afghanistan. the critical commercial link between -- pakistan and afghanistan. it provides a route to the capital city of kabul for improved government, trade, health care, and education. i want to say a few words around the circumstances. as a picture shows, the topographical and geologically features of this area within the construction work has occurred are some of the most challenging we faced in afghanistan. the security environment has made this the most dangerous project our company has attempted. suffered 21 killed, 51 wounded and four missing. security as a percentage of the overall project cost was around 30%. to compare other parts, security costs average oftentimes 8-10% for overall project costs.

one road alone experienced 147 direct attacks, and 40 mine and other ordnance explosions. the traditional metrics the government measures the efficacy of projects -- to not pay the full picture. and lack of existing infrastructure and technical capacity, and experience of afghan companies, the need for capacity building and -- measuring success just in scope, spends -- schedule, and buds. sustainability is critical for the long term benefit for the afghan people and the significant investment made by the american taxpayer and donors. the louis berger group -- sustainability concerns in the training we provide to subcontractors and employees. this approach has been the heart of the work in the developing world for more than 40 years. in the long run, the old and the sustainability of many projects

will determine the ability of the afghan economy to generate enough revenue to provide workers and materials that will be needed in order to maintain and sustain projects we and other companies completed. this security environment increases the importance of communications between the contact -- contractor and government. we have worked hard to communicate with the contract and officers, technical staff, as well as u.s. military to properly address security issues as they arise. louis berger group is honored to support -- incredible efforts to improve afghanistan's physical, social, and economic infrastructure. we met with the commission on wartime contract on four occasions to discuss reconstruction and to discuss recommendations found the most recent report. we support several of the commission pots of recommendations including integrating content support and operational plans, expanding and improving qualifications and experience level and government acquisition personnel, expanding competition requirements, and requiring improved contract it ministration and oversight of contingency contracts.

lbg believes these will all be constructive improvements. we followed the efforts of the commission of a subcommittee to improve the manner -- oversees the contracts and its emphasis on sustainability of our reconstruction program. at the louis berger group we strive to deliver quality construction in a timely fashion with in the premise. the company and employees do this work because we have seen the tangible improvements in the lives of the afghan people that result in our work. thank you. >> thank you, mr. walker. mr. hakki? >> i'm sorry? ok. chairman mccaskill, ranking member portman, and distinguished members. i think the subcommittee for the

opportunity to share experiences and lessons learned -- learned as part of the reconstruction efforts in afghanistan over the past nine years. we share your interest in examining how will the government can bring greater efficiency, transparency, and accountability to the construction contracting process. we believe these goals can help everyone deliver projects that are on schedule, within budget, and sustainable. contract -- since 1985, contractor was privately owned u.s. operation headquartered in mclean, virginia. i joined it in 1994 as executive vice president and was appointed ceo in december of 2010. contract has offices in egypt, -- and afghanistan. we provide engineering, procurement, and construction services as well as facilities operations and maintenance. our focus primarily is on

military, institution, and infrastructure projects across north africa, the middle east, and central asia. over the past nine years, we have completed more than $1.5 billion worth of fast track design build projects in afghanistan -- for the u.s. army corps of engineers and the air force. working as a prime contractor we have constructed brigade -- and usa and coalition forces brigades, airfields', and decontrol points, supply points, broke fuels', storage and supply, forward operating bases and other facilities. we were also awarded the contracts for the permanent operations and maintenance services required to perform oand m work on numerous a and a and a&p sites in afghanistan. contract business model and afghanistan is somewhat different than most contractors

in that we self perform the majority of our work rather than acting purely as a construction manager. contrack has been a vital partner but the corps of engineers and cons -- accomplishing the mission statement to provide a sustainable development projects for the afghan people that employed the populace, build skilled human capital, and promote the future stability of afghanistan. in order to utilize the local labor force, the majority of afghans must be trained in a skill. contract -- we set up a training center to train and educate the afghans on a variety of construction trades. to date, we graduated more than 3000 students, most of them are still employed by contrack. as a prime contractor we foster relationships with local firms so they can succeed.

this requires ongoing trading -- training and guidance concerning u.s. technical and contractual requirements and obligations. under the challenges we are still facing over there we have the contract in with foreign contractors. afghan and international contractors often received contracts which are more than they can handle. many of them are also not familiar with u.s. contract requirements. unfortunately, we share the perception in the international community that there is an uneven playing field in that foreign contractors typically are not subject to the same standards as u.s. contractors. these include safety, at 6, bonding, cost accounting requirements, to protect workers and -- of the u.s. government. we believe the core of engineers has begun recognizing the risks in awarding projects to foreign

firms based on low price only. for example, the government recently awarded a contract to 14 firms, all of which are american firms. future task orders will be competing among these 14 firms only. this promotes full and open competition with qualified construction contractors to deliver the best value for taxpayer dollars invested in afghanistan. we appreciate the difficulties faced by the government and commend the professional manner in which so many contract personnel perform their work in a hostile region. however, the frequent rotation of core field staff has created a cascade of challenges to the contractor in the government. for example, delays in resolving contract modifications due to government contracting officers and related personnel causes delays in payment to the

contractors. similarly, high turnover of government personnel on the field causes delays in submission of the final evaluations. quality at the job site is overseen by the qa representatives. they are experienced in other trades but lacks sufficient training to understand and enforce the technical requirements of what they are assigned to. lack of partnering between the contractor and the core is another unfortunate result of the personnel turnover. contrack has purses abated in numerous partnering sessions with the court another reason -- regions, such as in egypt. we believe it is vitally contributed to the success of the projects in those regions. however, in nine years in afghanistan and after completing over 50 projects, we have had only one partnering session with the core. hi turnover of -- high turnover

and lack of cooperation between different government agencies in charge of projects and end users, this often causes delays and cost overruns. sometimes the end user requirements are not fully understood by the core. for example, on design build projects, early partnering session regarding the agency, contractor, and facilities and user, would really help parties achieve end user design goals. transportation and logistics -- the high volume of cargo creates delays at the base entry control points. material and equipment convoys are at the mercy of the transborder. politics that can block and delay shipment of material it can make matters worse. working with the afghan ministries is a challenge. in the afghan ministries change procedures on a regular basis -- requirements for tax exemption documentation, approval --

approval of visas, lack of stability, is further compounded -- by a lack of cross training. new and constantly changing presidential decrees further increase the uncertain risk environment. for example, the latest ban on private security firms will cause disruptions, delays, and safety problems. we believe the foundation of a good project is a well- coordinated design. such design must meet the general guidelines of the corps and address the end user's needs. on a project in that room air base we were tasked to design and build the main entry control points. we have designers on-site meeting of the corps and the fourth objection staff to agree on a design that dissatisfied everybody's requirements. this eliminated a lengthy review process and clarify the objectives of the project. all of these partnering efforts resulted in a successful project completed on time and on budget.

i appreciate this opportunity to share our experience in afghanistan and would be pleased to answer any of your questions. >> thank you very much. mr. walker, i wanted to talk a little bit about the road. i am a stand where it is located. i understand strategic planning that went into this particular road. but i am trying to figure out whether or not someone along the way should have pulled the plug. let's talk about the initial price tag. we are talking about now the highway -- the coast highway that goes down through rough territory and significant elevation, covered in snow in of the winter and, frankly, a very challenging highway project under the best of circumstances. clearly very difficult under the

circumstances, especially considering you are going through some significant taliban real-estate. the initial price was $69 million. we are now up to $176 million for 64 miles of highway. what went wrong in terms of the initial price tag for this highway? why are we barreling toward its -- toward three times expensive than a originally intended. the price tag, 3.5 million of that is security. what we are saying is one-third of the cost of building this are in fact security. did and no one had any idea that was going to be the case before we began? >> when we started the project,

the incidence of violence were not quite as high as they were. the original estimate of security costs as a percentage of the contract -- excuse me -- was around the 12% level, as i recall. the challenge was, as we got into it, probably a year into it, the attacks really began to increase and the situation really began to significantly deteriorated. at the time -- and we had worked on roads throughout afghanistan for many years -- at the time the project was initiated, there was no reason to assume that the security conditions would deteriorate the way they did. recognizing the possibility always existed. we have been working over there and it is a very fluid and volatile situation.

but no one anticipated the level of violence and the level of the tax the project was going to sustain. >> who makes the decision as to the level of the tax question is of the military? it would be hard it would not to guess that this would be significantly different from other high we project just by the fact of where it is located. frankly, the reason the one of the road in the first place is the one it to clean out the hornet's nest of taliban in the area. i wanted to figure out who i could talk to who misjudged the security environment by so much. >> i am not sure it is a question of this judgment -- misjudgment. the security situation really had begun to deteriorate. at the same time, when you look at security and afghanistan is not one single footprint --

footprint. the north and west is a different profile than the east and south. when we began work on one road in the south -- for example, working in the same type of conditions. the other extension of the coast, we did that road. we did not have nearly the security situation that developed later into the program. so, our historic experience was certainly add a serious level of security, but not to the extent of what we are experiencing now. >> is a typical you would have as many subcontractors you have on this? is it typical? you would typically have 24 first-year -- tier subs? >> the 24 first-tier subs, most

would be very small. >> give me an example. i am trying to figure out for 64 miles, you have 167 different subcontractors for 64 miles. what in the world are they all for? >> you could have a small afghan subcontractor whose job is to clear ditches. another subcontractor who would make new walls to approach to a bridge. you could have another subcontractor who could work on the coleworts -- culverts. there are many small aspects to a construction project. one of the things we wanted to encourage is the use of afghans as much as possible. >> how many of the subcontractors are afghan? >> without looking at the list i can't say -- and this is a guest -- i would guess it is the majority. >> we would love to get the exact number. that would be very helpful.

i am most concerned about the money paid to folks where there is every indication they are the bad guys. is this a reality that america has to accept, that in order for us to do things for the afghanistan people, that we have to pay the people who are killing us? >> i don't believe that is the case. with the security firm we have -- providing security, all of the local afghan security providers are placed into the military's by matching data system to check against the bad guy list. if someone were to turn up from military, u.s. aid would say there is a problem -- >> anybody you had to remove? >> mr. arafat, i was informed he

was put into the biometric data base and there was no indication he was a personal interest. and they specifically told us he was not on their list. >> he was fired? >> all wheat were consent to use him but the project was withdrawn -- so his employment was terminated. >> he was getting $1 million a year? >> no, ma'am. he was responsible for providing drivers and vehicles. he did not provide security, as i understand it. his responsibility was to provide drivers and vehicles, which he did. the cost of those vehicles and drivers and fuel was $40 a day per vehicle. we compared that against seven -- similar charges for running vehicles and that was consistent. the charge of those vehicles was, i believe, a little over a million dollars. >> i have additional questions that i will ask on the next

round but i will turn it over to senator portman. >> thank you, madam chairman, and i think the witnesses for being here today. -- i thank the witnesses for being here. this should be forward-looking but there are some questions that should be asked and some assurances that should be given as far as the steps taken -- not so much as regards to the road. i have some questions following the chair's questions. but regarding some of the overbilling practices and what kind of internal audits or other controls that have been put in place. in november of last year, my understanding your firm received at the largest fine ever for a contractor working in a war zone, $18.7 million in criminal penalties, 15.6 million in civil

penalties for overbilling. as part of the agreement your company admitted from 1999 until 2007, former executives submitted false, fictitious, and ford's and an overhead rates for a direct cost and correspondingly resulted in overpayments to the government -- of the government in excess of $10 million. federal prosecutors said in addition they believe it is between 15 and 20. what i want to give you a chance to respond to is what assurances you could give the committee these kinds of abuses will not occur in the future with taxpayer dollars -- have you included internal audit controls? how you plan to have billing practices reviewed by out side firm -- outside firms? >> in 2006 we noticed a problem in our overhead. and we initiated an internal review -- and in june of 2007 we

initiated a refund to the u.s. government of $4.3 million. in august of 2007 the justice department let us know that we were under investigation, and they intervene with us at that point. we had already seen there were problems in the overhead structure. we immediately pledged their full cooperation. let me take a half step back. we have drawn in and out kind -- outside accounting firm for an analysis. we shared that completely with the department of justice. and what was determined to was the cost associated with one overhead pool was permanently moved to another overhead pool, and that was for u.s. government overseas work. that was wrong. that was absolutely wrong. in looking at that situation,

and recognizing there was the problem, we worked with the department of justice to, again, identify what the damages were to the united states government and certainly volunteer cooperation to initiate their refunds. the individuals who were associated with that improper practice are no longer with the firm. we initiated a complete restructuring -- i took over the presidency of the firm about two and a half years ago and initiated a complete restructuring of the controls and policies and procedures in the company. i created a much more robust compliance and ethics department. we put the entire company three training -- the accounting department, through many, many types of training. we put in place scores of new controls. we brought in yet another outside accounting firm to test

those controls. it is one thing to have policy and procedures. it is another thing to make sure they work. so, i brought in another independent accounting firm to test us to see how we are doing, as we need to make sure that not only the policies and controls are on paper but that they exist in the culture of the company. so, we have been in that process. as part of the epa, we aren't a monitor and we share everything with them -- we monitor all of the training programs and all of the testing -- to provide assurance that the controls we put in place protect the u.s. taxpayer. we have shared this from day one with the justice department, u.s. aid, many presentations and we laid everything open and there to make sure we are as transparent as we possibly could be in the situation. >> thank you. i am glad to have given you the opportunity to respond. obviously what this committee is concerned about are the ongoing

efforts to have both internal and external reviews, through the monitoring and other safeguards. we want to make sure, as we said earlier, this incredible expenditure of taxpayer funds is being properly spent given where we are in afghanistan. let us go to a specific project, if i could, that you discussed with the chair. and that is the 64-mile highway that has cost now $121 million and the final price tag is expected to be $176 million for -- or about $2.8 million per mile. cost overruns, as a look at this, have now exceeded 100%. i don't know if that is accurate or not but that is how i read the numbers. in your testimony, you attributed this to the security environment. you responded to the questions about the security environment. i guess i would ask you a

question in addition to the security issue. can you tell us what is the cost overrun excluding security costs? >> 17 mccaskill mentioned $69 million, i should clarify -- that is of the estimates we thought at the time it would cost to build that road, construction costs. the bid came in and a firm that won the contract was the low bidder, it came in at 85 million or 86 million. that was the starting point for us for the construction -- not counting security or the construction management over the contract. from our perspective, the starting point was about $85 million or $86 million, and the total cost at that starting point, when you include security and construction manager was about $107 million.

the 85 million or 86 million bid by the construction firm, the job would come in basically at that price. the construction costs are not experiencing large overruns. the primary driver of these costs are security. it exceeded 30%. it has grown throughout the process. and it grew to such a point that we are not in the security -- that -- we are not in the security business and we saw security costs continue to grow as a result of the security situation. so, last year and one of the modifications to the contract, without prodding by u.s. aid or by our own volition we told them we would forgo profits on security moving forward from last year. we were entitled to it but we voluntarily chose to forgo $1.4

million of profit on security, because we are not interested in making a profit because of that kind of situation, so we voluntarily decided not to. >> my time is running out here -- a chance for further questions in a moment. but if you could provide the subcommittee but the cost overrun date that it would be helpful. he said the primary driver of the costs are security related. what we are interested in knowing is, which of the costs are not security related -- understanding what he said that there has been a change in the security environment in the country as a whole. but if you could give us the data -- the data on cost overruns that are not security related -- if there are some, we would love to hear and why. because of the basis of the contract being on a cost-plus basis, i assume, there would be

profitable. we want to hear what those cost overruns are. >> let's just get an overview. approximately how many different contracts does your company had in afghanistan, mr. walker? >> the larger -- largest one is iqc that is joint-venture. >> for all of the road to? >> not all of the roads. there are roads being executed under different contracts mechanisms. but our responsibility has been roads. so, under the contract, road task orders -- i believe we have done four road, if i am not mistaken. >> are there other types of contracts company is doing besides larose? >> we have small contractors, a sum -- subcontracted to other firms.

we also have had a couple of small projects under the africap contract -- have a handful of those. >> mr. hakki, you indicated most of the work you have done has been with the army corps for the military as it relates to structures, either supporting the afghan police, the afghan national army, or the united states military. have you done any projects that would be considered civilian infrastructure projects -- electrical plants, health centers, schools, anything of that nature? >> no, we have none. >> let's talk about oversight. i was shocked when you said in nine years you had one meeting with the corps of engineers. how often do you see u.s. aid officials, mr. walker, at the

coast project? how often are they there? >> i am sorry, senator. the meeting i was talking about was a partnering meeting, not normal, regular meetings. we have regular meetings with a corps in country -- >> partnering, like planning -- >> where we have top executives of both agencies and the end user and they meet with a whole day or perhaps two days in a remote location and discuss strategy and partnering for the whole project -- >> and sustainability. >> and sustainability. for that, only one. but regular meetings with the clients, we have those on a regular basis. >> i understand. what about oversight on your end, mr. walker? how much does u.s. aid show what on-site? >> in the project from the country, they definitely come in. one restriction they work under,

there are restrictions about being able to move in the country. i have known quite a number of u.s. aid personnel who want to get out more. they are forced to travel under very restrictive security restrictions, such as movements in mraps, for example, but they do get out. >> what about the contract officers? do you have contracts with cors, either one of you? >> yes, we do. but we have to emphasize our projects are a lot different. because our projects are all inside the wire, inside the perimeter of the base, where most of the times, the officers are there. it is a lot easier for us to meet. >> the you think the cors are doing a better job and contract

oversight? >> they have definitely improved over the past nine years. we have definitely seen a lot of improvement in all aspects. including the government internal personnel you just mentioned. most of them are now on one- year rotations were initially, into the of the three, we used to see people on 60-day, 90-day rotation and now they are getting into one year. i still think there is room for improvement. they could increase that. but it is definitely an improvement. >> let's talk about bribes. i have spent some time in afghanistan. and i am hopeful that neither one of you will test our -- test us here and not acknowledge that of brides have been an essential part of us doing business in afghanistan, regardless of what we are doing. what can you tell the committee

about bribes and the bribes that have been paid at various places and levels, whether it is under the aegis of security or other "services" that are needed by local folks that are used to -- used to getting their piece of the pie? >> i can tell you, we do not have any part of that whatsoever. we have a very strict company policy against bribes and we just don't participate in that. and on several occasions, it cost us the delays -- we had to suffer because we didn't agree to play that game. but we really don't. >> mr. walker? >> we see no evidence of our security personnel providing bribes. i think the casualties we are taking would indicate that is not something we sponsor or in -- >> i assume when the security cost went way up, the casualty's went down. >> no, ma'am.

>> casualties remained the same level even though security has increased dramatically -- in a dramatic fashion? >> for example, two weeks ago, two of our security personnel were kidnapped and taken to a local village -- they brought the villagers out and executed them. whether that happens two weeks ago or whether it happens 30 days from now, we still have to maintain a level of security. in a ramping up the security -- it is one of the unknowns. we did not know what we may have prevented by having more security. but what we do with our security profile is to create a security bubble and to make it as airtight as possible so the work can occur. but when you move on from that bubble, you still have infiltration to plant i e d's and minds. when workers go home, in the case of the gentlemen two weeks

ago -- they were on their way home after they left to be and were kidnapped and executed. we have to maintain a level that allows to get our work done. are around three or four work -- weeks ago you were probably aware of the attack that occurred north of the road in which 36 were killed. they were trying to use a lower level security, as i understand it, and they could not withstand a serious assault. so, how much is our security footprint a deterrent from a serious assault like that? i don't know if i can answer that. >> you can't prove that you can prevent. i don't think either one of you would say bribing is not a serious issue in afghanistan -- rights? you are not going to tell me that. >> it is definitely a serious issue and it happens on a daily basis. >> everywhere. >> week it threatens, we get calls to give the bribes -- we

get threatened. like as said, we have been forced to suck it up and delay delivery, the late normal procedures without government simply because -- delay normal procedures with our government because we simply do not play the game. >> do you think we should have built this road, mr. walker? >> a couple of years ago a reporter from "the wall street journal" if we should have built a highway that we constructed. it has been under attack. all the bridges have been damaged. he said, is it under such attack -- was it worth the trouble to build the kandahar highway in the first place? i said they are attacking it because it is important and if it is important it is worth building. i think the question is not should we have built it or not

build it, but is there a different way of building its that would get it done quicker or lower the casualty -- low where the security profile. again, when we started the road, we were at one level and it advance. we build a road a few years backit was the first contract tt we had. we knew it was going to be bad from day one. we got together with the military. and we embedded ourselves with them. they actually did the ground work, they had their dozers out there and they blazed it. we did the asphalt work. we were surrounded. the province was problematic

territory from day one. >> so, why did you not do the same thing on this road? >> when we started, no one recognized -- in our experience, again, our experience working on roads in the area indicated it was not like this road. >> when she realized it was, why did you not go back to the drawing board? >> i think that is a great question. this hearing is getting to the lessons learned. getting back to my opening statement where i said, you cannot just look at the typical metrics, but there comes a time when you probably should have stepped back and said we need to change the scope. we need this road to be done, but maybe there's a different way to get this road done. what ended up happening is, we went into a reactive mode.

we have a security situation. we have to prevent that particular situation from happening again. from the lessons learned, we have to recognize an extreme environment can change a relatively quickly. >> it is sad to me that we are just now talking about that lesson learned. that lesson has been learned many times in iraq, where the security environment changes and billions of dollars worth of investment is lost because the security environment change. what i have to say is, this is a long, long, time -- this is a long, long time we have had lessons learned. it is frustrating. who is the person that you see, mr. walker, that could have in this whole enterprise of building this highway, who is the person that should be held

accountable for not changing the way that the road was being built in light of the security environment changing? not within your company, but within the government part of this, the military or the state department? who is the person who should have said, "you know, we have to go back and do this differently "? >> i do not know if there is a person, but it is really important we make sure our communication is at its best. >> who can i blame? >> who can you blame? >> guests, who can i blame? -- yes, who can i blame? who can the american people look to to hold accountable for the tens of millions of dollars, where we are not really sure where all that money has ended up? who should i have before this committee to talk about it? >> i am confident we have

maintained controls over the money that is going to be secured -- >> i should not have added that. i want to know who is the person, and if there is not a person, that is the problem. who is the person who should explain they were monitoring this expenditure of american tax dollars, that they thought it was under control, and they never said, stop, we need to have a meeting, we need to talk about this. who is that person? >> i guess i would say there is not one person who could be held to that standard. i think it is incumbent upon all of us to say, look, is there a different way? >> you know what happens with all of us? that means none of us. somebody has to be held accountable. there has to be someone in your organization that has primary responsibility and accountability, if they are not saying and the project ends up

costing win more than it should have cost. thank you very much. >> thank you. three questions, and i would appreciate it if we could try to go through these quickly because there's another panel right behind this. again, to mr. walker, giving you a chance to respond, he talked about the highway that is under discussion today -- you talked about the highway that is under discussion today and the security situation and the cost overruns. let me give you a chance to respond to a report. this comes from the "new york times" back in may. "despite the expense, the highway is already falling apart and is treacherous." would you agree that the highway is deteriorating, and if so, is

your firm fleeing -- paying for the repairs? or is usaid and the taxpayer picking up the tab? >> first of all, i would completely disagree with that even the reporter was referring to one particular crack in the road. if you have the paragraph i included with the opening statements, on the right-hand side of that paragraph, you would see where that crack is. he would also see a fault line that runs down the mountain -- you would also seek a full line that runs down the mountain. the crack is not a result of the fault. whether it is colorado, west virginia, afghanistan, mountains move. it was not an issue of

workmanship. it was an issue of that fault moving. i spoke to the technical engineer who had been out there. he goes over. >> who is going to pay for the repair? >> that is a maintenance repair where there have been issues -- that is a maintenance repair. where there have been issues of equality, we have the contractor paper that, when it is their responsibility. when a mountain moves, it is not the responsibility of the contractor. it is a maintenance function. >> gentlemen, we're not going to leave you out totally here. [laughter] we are proud of that. afghanalk briefly about first. this is a policy of the

administration i supported. build afghan capacity. you directed us a little bit in the door opening statement to the 3000 students to say have graduated from a training course and you have locals engaged in retraining efforts. i would ask you both, how do we get afghans engaged in the sustainability? this road, the next time there is a crack, and you are gone, we begin our withdrawal, who is going to fix it? can they afford the technological capacity to do it? i guess i would like to hear from you about exactly what you were doing to ensure there will be this ongoing support by retraining, by developing this expertise? what challenges do you see by

this stated policy, and do you see any unintended consequences of it? and i think mr. walker alluded to those earlier. >> yes, the afghan first program is not something you're very familiar with. that is very limited to afghan company's. we know it is their. we know it is very successful. i cannot really comment on those that participated in that. that does not mean the policy of -- >> that does not mean the policy of contractors like you for afghans? >> i think the afghan first program is limited to afghan companies, if i am not mistaken. that does not mean we are excluding the afghans from our project. we hire a lot of afghans in our project. we train them. we engage with the local afghans

in communities. >> do you think it is good to have them because there is a direction in terms of policy? >> dear is an element of our contract that encourages -- there is an element of our contract that encourages local labor, local community's. -- communities. >> you would not have to do any of it? >> contractually speaking, no. the training center will establish was really completely out of pocket. there was no government funding. it was a training center we developed. it was completely out of pocket. we thought it was a great idea because it really addresses senator mccaskill's concern. the best way to address these issues would be with training and education. the way we did it is very

simple. we hire these students. believe it or not. we had to pay them a delete allowance. we had to transport them. we had to give them food while they are there. it ain't peanuts. the cost was very little compared to the overall reconstruction process. we would graduate them with a simple -- maybe i can introduce this as part of the record if possible? it is a simple certificate, really, that states and individual has been trained for the last few weeks on a specific skill and it really does not cost much, but it means the world to this individual because it provides security and skills and a job that they can use long after we leave. that is why it has been really successful, this whole program for us. >> talking for the government

panel, there is some disconnects between the work you have done -- there is some disconnect between the work you have done and moving toward not just using subcontractors and labor for the future, and what my understanding was, which is that should not be something that is discretionary, but rather part of policy. so, we will talk more with the government panel about that. mr. walker? >> we have a major and significant program for sustainability in roads underway. currently, we have a program were 1,500 kilometers of road are under maintenance. we believe in the afghan firms and the afghan employees. again, it is 1,500 kilometers under maintenance.

our employees have moved up the ranks so that the deputy taskforce manager is -- we could take that over for another six months, maybe a year. the point is sustainability also means funding. we have worked with the afghan ministry of public works, ministry of finance, as well as our road fund. the minister of finance has indicated he feels roads can be funded, major roads can be funded through fuel taxes, something along those lines. this is now on president karzai's desk. the issue is whether it is filed under public works or an independent authority. i think that planning for things, as we have discussed earlier, having foresight into whether these roads can be

maintained in -- and i believe the answer is yes. the crack we talked about is being prepared by afghans under that maintenance task order. i think it is a real example of sustainable success and looking at sustainability and the progress the u.s. has made for roads. >> one more quick question. this has to do with, in a sense, what the chair asked earlier about these multiple subcontractors and gao has raised concerns about this, the multiple tiers in subcontractor's. we talked about concerns over vetting, cost-control. i am going to focus on one area, what kind of contract. id seems to me there are the wrong -- it seems to me that

there are the wrong economic incentives. in that case, contractors earned more than subcontractors. subcontractors been more. you will be earning more as you spend more rather than creating an incentive for efficiency. for example, rather than incentivizing subcontractors to deliver a material costs, they would profit on that waste at any level. so, my question to you is, do you think we ought to change it? do you think we should use contracts of more widely? -- the think we should use contract more widely? if so, what sort of contracts should those be on? >> 95% of our contracts are

fixed-price. we have little subcontractors on them. the projects we have done in afghanistan, only one has been cost-plus. all the others have been fixed price, competitively bid. >> all the other contracts? >> fixed price. >> outside the compound, is that true? >> we are coming back to this being extraordinarily difficult to do. there are just some many unknowns when you're dealing with a minefield on the side of our road. what we have done is, we tried to blend pieces of fixed price in with cost-plus. we have created a contract

modality where we contractfixed uni-prices. an example would be, it cost $440 per cubic meter all -- for cubic meter. if that is altered, the unit price does not change. what changes is the quantity peon -- what changes is the quantity. that quantity is metred everyday. we have tried the best we can every day to blend these contracts blendcost-plus. >> if it is a smaller contract that is defined, that is the key. if you can define what it is. then it is certainly possible. >> thank you. one final thing i want to say -- just as we are concerned about

the safety and security of our troops who are your employees and your subcontractors -- we wish them well. >> thank you. >> thank you both for being here. we really appreciate it. and i reject i want to -- and i want to second senator portman's sentiments. make no mistake about it. the people who live work done many of these projects are in as much danger as many members of our military. we mourn the loss of people who work on these projects for our government as much as we mourn the loss of those who looted -- who lose their lives in these theaters. so thank you son much.

>> i will go ahead and introduce our next panel. first, william solis, the program director at gao. is responsible for a wide variety of program oversight. his portfolio includes operational contract reports, force protection for ground forces, supply chain management. equipment reset.

i understand attending this hearing was very difficult for you. david sydney has served as deputy assistant secretary for pakistan and central asia since 2009. he was the deputy assistant secretary for east asia. prior to this, mr. sedney served on the security council in afghanistan and several other countries. he testified before the subcommittee in april. we have the newly appointed deputy assistant secretary of the army. mr. denver manages the army procurements mission, including the contracting business system. as the functional career representative for contracting,

he represents the professional development of the army contract in work force. we have the assistant to the administrator and the director of the office of afghanistan- pakistan affairs since june 2010. prior to joining u.s. 80aid, he was chair of the afghanistan and pakistan working groups. again, please join me so i can administer and of. do you swear that the testimony you give before the subcommittee will be the truth, so help you god? thank you for being here. we will begin with mr. solis. >> good morning. madam chair, ranking member

portman. collectively, dod has obligated billions of dollars for contract services and goods in afghanistan. given the magnitude, kim -- given the magnitude, the importance of contracts oversight cannot be overstated. my statement today will focus on two areas. first, the contrasting office representatives management responsibilities in afghanistan, and the sense that the agency, that non-u.s. vendors in afghanistan are tied to terrorists or criminal activities. they act as the eyes and ears of the contracting officer and thus serve a critical role in contract oversight. dod has taken actions to better

prepare contract oversight in afghanistan. to improve the capability of the course -- of the corps, dod has developed a chord -- corps train program. gaps do exist. required training does not include specificity about the contract in afghanistan, such as information about the afghan first program or working with private security contractors. also whether the corps has relevant technical expertise is not only considered prior to signing an individual, but to oversee an individual, even though corps has a significant

role in determining if the contractor fulfills technical requirements. some of the requirements lacked the necessary construction experience, sometimes the resulting in a new abilities that can be used by u.s. or afghan troops having to be repaired or rebuilt. it has resulted in money being wasted, substandard facilities. for example, contract individuals from our regional contract centered state the destruction of our -- the construction of our towers were so poor they were unsafe to occupy. the recently reported that d.o.t. may have processes -- dod and processes in place --

while dod began to bet non-u.s. firms in august 2010, there were several gaps in the process. for example, vendors that bid below were not routinely vested. subcontractors were also not routinely vented. -- vetted. there are other risk factors such as contract performance and in taliban strongholds. these have not been documented. they were largely vetting vendors with existing contracts that may not be vetted in the

future. this also include army corps of engineers. it is unclear how they will be able to vet vendors in a timely manner. the process may face similar limitations. there is an urgent need to mitigate the risk of uncertainty. all these processes are in the early stages -- while these processes are in the early stages. officials are considering changing the dollar threshold were vetting of recipients based on risc. however, the official

documentation does not include other risk factors. cents -- since 2008, they have required risk of betting, but it does not use the same affirmation at the same rate when they vet themselves. the use of afghan vendors may increase under the afghan first policy. in closing, the secretary of defense has called for a change in department culture and directed staff to identify resources and policy necessary to improve it. in the wake of these changes, it should include changes anyway dod manages contracts. this concludes my statement.

i will be happy to answer questions. >> mr. sedney. >> [inaudible] i would like to comment on the overall larger strategy background in afghanistan. i will begin by reiterating the u.s. objectives in afghanistan -- to deny a safe haven to al- qaeda, to deny the taliban the ability to overturn the afghan government. to support these objectives, the u.s. and coalition forces are working to continue to degrade the taliban insurgency to provide a base for the afghans' security forces and the afghan government. as you know, based on the success of our strategy, president obama recently announced the united states would begin a deliberate,

responsible drawdown. an initial drawdown often dozen trips will occur over the course of this year. the main will occur by the end of the summer of 2012. our strategy in afghanistan includes the cooperation of afghan and u.s. security forces. together, we have degraded the capabilities of the taliban in helmand province and kandahar province. afghan national security forces are making progress. by the end of the summer 2012, there will actually be more afghan and coalition forces in the fight then there are today. that is because we will increase the afghan security forces by october 2012. in addition to the 68,000

forces we will have in addition to -- and that is also augmented by our partner allies in nato and elsewhere. the security gains are enabling key political initiatives to make progress. we have begun a process. we're beginning to see reintegration and reconciliation and we are discussing our strategic partnership with afghans to signal our enduring commitment. i would emphasize that while our progress in afghanistan is substantial and our strategy is on track, significant challenges remain. the taliban make spectacular efforts, as they did the other day in kabul, on the attack on the intercontinental adele. however, just as that attack was defeated, so will others we

encounter. at the same time, the enemy is experiencing the benefits of self governance. they're becoming part of the transition process. i want to emphasize how important our coalition important -- our coalition partners are in afghanistan. these partner nations have made significant contributions and sacrifices. madam chair, i want to close by thanking you and your colleagues for your support. thank you again for allowing me to appear before you today. >> mr. denver? >> madam chair, thank you for

the opportunity to speak before you today. i will request that my full written statement be entered into the record. the u.s. army has had puts on the ground in afghanistan for nearly a decade. when our army deploy is, they have to have support from contractors. currently over 90,000 contractors are supporting our troops. the ratio is just under 1%. we have the largest contract oversight mission the united states has ever managed. we face can -- we face challenges, but the army has made significant improvements. i would like to share with you what the army has done to change the contingency contracting environment. most of the contracts issued are awarded competitively, entering the best possible price.

we accomplished this by -- in the fixed price, the contractors only pay the amount agreed upon. contractors must determine giving the availability of data has been especially problematic as we strive to make awards to afghan firms in terms of the afghan first program. the contract assessment reporting system has limitations and peter. and afghanistan, we also need the contract consistent to alleviate a number of problems including solicitation proposals and tracking performance. it has proven to be an invaluable tool. oversight of contractors has been a significant concern of congress, audit agencies, and the contracting community.

prime contractors are required to provide significant oversight. the contrasting command has dealt with subcontractor information to capture additional information that will aid in vetting subcontractors. betting subcontractors is a key element in ensuring the stability of u.s. war fighters, as well as the security of our efforts in afghanistan. in august 2010, a center was a salivary in tampa, fla. to vet -- a center was established in tampa florida -- in tampa, fla. to vet contractors. front lines.

we have the issuance of an army order. as a result, and in the past two years, the army logistics university has provided training to 2200 cor's. contingency contract in results when employees are technically qualify for their assignments, and to ensure they are qualified, personnel are involved. the senior contracting official in afghanistan provided guidance on construction experts. endemic corruption in afghanistan remains a challenge. the u.s. government has set up several anti-corruption task forces in afghanistan that has improved the contrasting

environment. madam chairman, the army continues to identify ways to provide the most by you for our contract in dollars and the most support to our fighters. thank you for your support. fox 4 to your questions. >> -- i look forward to your questions. >> chairwoman mccaskill, i began working in afghanistan in 1983. i have been principally engaged in establishing the u.s. efforts in afghanistan. i have repeatedly raised concerns about the corrosive effects of corruption and waste in afghanistan post-2001. indeed, these and not only of fiscal importance, but national security and sell. one of the reasons i took this job was to improve our

accountability. we owe this to the american and the afghan people. we must ensure that our efforts are sustainable, durable, and realistic. with the support of the american people and strong bipartisan support in congress, we've made a dramatic achievements in afghanistan over the last decade. for example, we of work to significantly impact -- we have worked to significantly increase the access of services to the population, literally saving tens of thousands of lives. however, training teachers has allowed over 10,000 children to enroll in school. this includes 35% girls'. gdp per capita has doubled since 2002, with 5 million

people lifted from a state of dire poverty. we are working to reverse taliban momentum and achieve progress. as we are on the path of transition, a process by which our afghan partners will stand on our own feet, sustainability is of paramount concern to was. we have worked with afghan an international partners to identify core investments that will identify at can capacity, promote economic growth, increase government revenue generation. those investments include agriculture, energy. for example, in energy, consumption is directly correlated with economic viability. a key component of our work is building afghan capacity in the power sector and supporting

power sector reform. -2009, united states launched a new electric -- onion to the asinine, the nine states launched a new electric utility. -- in 2009, the united states launched a new electric utility. this has increased to 24-hour availability today, paid for by a viable system. yet i cannot overemphasize the challenges involved in taking over these efforts to combat a vicious insurgency and terrorist threat. continuing concerns on our projects are paramount. in 2010, attacks on civilian efforts were increased sevenfold. weeks into this job, administrator shot and i concluded we need to do more to safeguard our investment --

administrator shw and i concluded we need to do more to safeguard our investment. we develop a comparable system for at the afghan initiative, or a-cubed. we are increasing our word mechanisms and project oversight. these are yielding concrete results. in addition, we have tripled our staff in afghanistan, 60% of whom are located outside kabul, allowing more time on the ground. i am also proud to say we've gone from 3 oversight staff in 2009 to 71 today. many of them are staying for multiple year to worse. we are under no illusions about -- many of them are staying for multiple year tours.

we're under no illusions about afghanistan. security threats requires us to extend significant efforts. when i left kabul in 1996 after four years working during the civil war there, watching the country develop in chaos, the capital was a heavily mined rubble pile and the taliban moving in. today, we can carefully drawdown u.s. resources in afghanistan. the entire u.s. budget in afghanistan is equivalent to just six weeks of our war effort. we will bring u.s. troops home more quickly and ensure they do not have to return.

this project only increases in importance as afghans to the lead in forming and future. thank you. >> thank you. sedney, wouldr. you. i was confused by your opening statement because it did not have anything to do with contrasting. obviously you were here to talk about contracts and. my first question to you -- who is in charge at the defense department and in terms of making contract in decisions as a relates to the infrastructure being built under the authority of the defense department. >> [inaudible] >> i need you to turn your microphone on. we cannot hear you. >> in terms of actual responsibility, and i me have to call on mr. denver who is more expert in the contracting area

than in. contract and is done -- contracting is done by the u.s. government would then afghanistan. -- within afghanistan. they are overseen eventually by the undersecretary for defense. >> i want to know who was in charge of the plan. so when you decide we're going to spend $500 million, $400 million -- i guess that is another question. how much is $17 billion, much of it will come from defense and, to that will come from state? >> i can speak for u.s. aid. i believe the request for u.s.

aid assistance is around the $3 billion level. >> the president is asking for $17 billion in 2012 for reconstruction. does anybody here know how much of that is going to be under control of the defense department and a much is going to be under control of the state department? >> again, i can say $3 billion from u.s. aid, and possibly another $1 billion from the state department. but i cannot speak to the rest. >> is that from the defense department, mr. sedney? >> the department of defense budget and the subcommittee has funding for operations in afghanistan which include funding for the afghan security forces. about $12.4 billion. for afghan security forces

funding. funding for reconstruction, i am not familiar with $17 billion being mentioned. >> what do you think it is? but to you think we're going to spend next year on building projects for the afghan people. >> in terms of building projects for the afghan people, that would go to the department of the state. >> what about serp? >> funding will be somewhere in the neighborhood of $300 billion to $4 billion -- $400 billion. cerp it is commanders the ability to build the foundations for stability. is not meant to be in place of the long-term reconstruction g.ndin

>> it is true that cerp has likeed, we're doing things building buildings. cerp funds were for small projects. now we have construction projects with cerp funds. >> we have, over the years, particularly in the area of roads. any most recent appropriations bill, congress gave us the ability to establish an infrastructure fund. the purpose is to divide out those projects that would be looked at as infrastructure projects and enable cerp to mainatin its focus. we're in process of putting together guidance of the

implementation of the afghan construction fund. we will be giving guidance on the department oversight panel. >> does the defense department have a certification process for sustainability before we send any american money in afghanistan? >> senator, i am not familiar with the details of contract processing or certifications. i would pass it to my colleague -- >> who wish to pass it to? >> i would first send it to the director for acquisitions -- >> is this ash carter? ultimately is this ash carter? >> yes. >> i am trying to establish who

was in charge. it is ironically difficult to determine how much we're spending and who is in charge. that has been more difficult than it should be. let's it to where the money is going. the special inspector general for the afghan reconstruction -- the previous special inspector general issued a report that four contractors, contrack and 3 other companies received $3.8 billion in contracts since 2004. they have also defense -- they

have also determined that the defense department contains inaccurate information. in fact, the report was so inaccurate, it is off by hundreds of billions of dollars. ok? you're spending another data base. main contract a list $400 million for the same period time. another reports says $454 million. 2 of these companies does not have information keeping mr. denver, i know your new. i am sorry you have to sit there today. your office has oversight in authority for contracting for what is now called triple-c,

contract and command. that office provides information. in preparation for this hearing, your office provided the subcommittee with information that showed one of subcontractors as having $191 million in contracts actually had only $5 million in contracts. they had a copy of the cigar report, but said nothing about the wild inaccuracies. i think you all see where i am going. i do not think the public can have any confidence that we're actually -- accurately reporting what is being spent where in afghanistan. i would like to know how you can explain this while the information -- this wildly inaccurate information? >> thank you, madam chairman.

we're currently coordinating with sigar. it is true that inaccurate information is being provided. we're working on a process for the future. this information was gathered from the subcontracting command to work with my office so we can pull reports to validate what the information. what we're seeing is we do not want to impact their ability to connect directly, but we want to make sure that we're able to double check the information being provided. the right now -- but right now sigar may need to audit to determine the source of the inaccurate information. >> thank you, madame chair. and think it may be helpful -- i think it may be helpful. correct me if i am wrong, mr.

sedney, the current contractors -- >> i cannot certify the total, but i would say for the department of defense, the average figure is about 25 contractors against the ratio we're operating under. >> earlier in testimony, someone said more than one contractor. mr.. solis -- mr. solis, what are your numbers? >> i would say it is roughly 121. >> the experience in bosnia and iraq is as you begin the drawdown of troops, we do not begin the drawdown of

contractors initially. is that accurate? mr. solis. >> that is our view. >> it is incredibly important we get the contract in right. one of the concerns raised today is about sustainability. as we continue to spend more and more taxpayer money coming even going forward on contract in, you know, we really creating something of value but is going to last and be able to be successful, including afghanistan for a stable government that means the objectives that mr. sedney played out earlier. let's talk about stability. there is a report that was pretty pessimistic. it says there is no indication that dod, the department of state, homeland security and

aching arrangements to make sure countries will maintain u.s.-funded projects and around. nor are they taking this into account and providing new projects or programs." that is disturbing if accurate, because one of the lessons you think we would want of new projects would be sustainability. in afghanistan, the u.s. has contracted for personnel, supplies, security, a large power plant the country cannot maintain or operate, security force training and support these costs exceed afghan funding capabilities. i guess i would ask first, and maybe mr. thier your the right person to talk about this from a u.s. a i.t. perspective -- what approaches tocies' projects to make sure they are sustainable?

are you ensuring a commitment of new u.s. taxpayer dollars that we can carry on after you were gone? how was the process formalized? >> thank you, senator. u.s. aid is focused on the discretion of sustainability. it goes in two different areas. 1 yes -- one is -- our projects we are building, how would they be used? that is one aspect of sustainability. the broader question is how does afghanistan itself managed to sustain these developments over the longer-term? on the first part, we certify that any program that we are doing that has a capital investment must have the sustainability plan. and fact, we have intensified

this in the last few months by creating a sustainability guidance, where we are assessing every program u.s. aid yet -- u.s. aid is creating. will this contributes to the ability of the afghans to sustaining investments in the long run? we take this seriously. >> let's focus on u.s. aid and projects. american taxpayers have paid $300 billion for this power plant. is rarely used. that is minder standing. the cost to operate it is prohibitively expensive for the acting government. recently, u.s. aid fund the project is not sustainable because the afghans cannot

purchase the fuel necessary for the plant and they cannot staff the plant. they're negotiating with their neighbors to get their power for a fraction of the cost than they would from the dual fuel source plant that cost $300 million. so, how did they get that wrong is one question? let's talk about the next one. there is a contract to build a diesel fuel power plants in kandahar. the program we're doing has a sustainability plan. the commission says there -- and you may disagree -- there is similar sustainability challenges. are we doing it again? so, one, how did usaid it the

first and run, and second, -- how did -- and are we again stepping into a situation where we're putting hard -- hard earned tax their dollars into a project that is not sustainable? >> the decision to invest power in kandahar was a decision made collectively in the summer given the critical nature of our campaign in kandahar and to shift the area away from the taliban. the first decision was power was not going to come online quick enough -- quickly enough to achieve that objective. there was a decision with my staff and u.s. a i.t. to -- u.s. aid to engage in power generation, which you are right,

which is not sustainable, to turn on lights in kandahar. there is, however, important sustainability components in that program. first, we're looking to increase the power supplied to the region both by building online down from the north of afghanistan that would provide long-term stable power as well as the power supply in that area. those two things together are the long-term stability plan. together with the fact that the afghan utility is collecting money for the power it distributes now. that means over the long term, they will be responsible for sustaining the investment. that is also related still -- related to --

kabul was known until recently as the dark capital of asia. it had the least amount of power of any where in the world. when the decision to build that plant was made, there was >> even once the plant was built, a landslide cut out that power line, allowing the only reliable source of plant to function. >> was that plant constructed as a back up power plant? that is what you are saying? >> it was constructed as a peaking power plant. >> it was intend for $300 million to be a back up plant? >> it was with the caveat that people were uncertain that the alternative plan, bringing a line county from uzbekistan, which has its own problems with the terrain it has to traverse? >> that was the design?

that is not my understanding. >> that was the design. we have made sure that the sustainability of that plan is a high priority in three ways. we are engaged to make sure they are in fact able to maintain the plant. >> could you provide the committee some data to back up the assertion that this was built as a back up power plant for peaking only? and with regard to the sustainability, we would love to see something on that. i'm over my time. quickly, not to leave d.o.d. out of this, with regard to the afghan national security forces in terms of sustainability, again the studies we have seen including from the commission -- and you may disagree with the commission, and i would like to hear if you do disagree. they think the investment in training and preparing the afghan national security forces risk being wasted in the long run due to the same sort of sustainability problems. between 2002 to now we have appropriated almost $35 billion

of taxpayer money to establish the security forces, and another $13 billion is being added to the 2012 budget. the commission concluded the prospects for the afghan government's ability to sustain these forces are meager, particularly considering that the national government's entire domestic revenues are about $2 billion a year. i would ask d.o.d. have we evaluated the sustainability of the support here? if so, what has our evaluation shown? if not, how can we do that how can we improve its long-term effectiveness? just as background again, we have committed $11.5 billion since 2005 to construct facilities alone, including bases, police stations outposts and so on. what are the long-term maintenance cost of these facilities, and do you believe the afghan government has the national resources ever to be able to maintain those

facilities? >> senator, those are important questions, and let me take them in two parts. i would like to correct the record. i do have the numbers with the exact number of contractors in afghanistan. it is 90,000 800. the department is required to submit a report as it does to the armed services committee and to the appropriations committee. this was dated june 21st, and we will make sure you get copies of the report. >> great. >> first is a question of financial sustainability. the ability of the afghan government to fund the security forces that it currently has and that it may need in the future. currently afghanistan does not have the ability to fund the security forces, and the u.s. government and to a certain extent our international partners are funding those forces. currently the cost of those forces, we are asking for f.y.

12 -- not f.y. 12 -- but f.y. 11, we have $12.4 billion, i believe, for that. a certain percentage of that is for infrastructure, other for training, and other is for sustainment of the forces themselves. as you point out, this is well beyond the capacity of the afghan government to provide for. let me go back to our national interests in afghanistan, which is to ensure that afghanistan is no longer able to be a base from which terrorists mount attacks against the united states. our solution for that is to drive down the insurgence through our military efforts and to build up the afghan military forces able to do that. since afghanistan doesn't have the resources to do that, we, you, the american taxpayer and congress are funding those security forces, again with some help from our allies.

the size of the security forces that will be needed in the future to contain the taliban is yet to be determined because we don't know the level to which we will be able to drive down the insurgent si. we are currently building the afghan security forces to 352,000 to october of 2012. that is based on the level of insurgencey we see now and the level of forces we have at that time. what we are aiming for is to drive down the insurgent, and have the afghans continually to improve that. what that equilibrium level is we don't know yet. >> i am well over my time. let me get it back to the chair. let me conclude by saying i understand the mission, and in many respects what a.i.d. is doing on the ground and what d.o.d. is doing on ground even

outside of the military involvement with contractors, carrying out policies that you are asked to do under very difficult circumstances. i have been there and had some opportunity to visit with some of your colleagues, and it is tough work. the question is whether it policy makes sense, whether it is a sustainable policy, because so much of what we are building and doing may not be able to be maintained subsequent to our far tour. these numbers are indicating that there is a huge risk. so what we are asking here is for a realistic assessment of what those risks are and the very important reassessment of how we look at these projects. if they are not going to be sustainable? why are we doing them? if we are building a back up power plant for $300 million that the afghans aren't using except for peak periods because they can't afford the fuel, how does that make sense?

that is what we are asking for here today and whatever information you can provide the committee would be helpful. again, i thank you for your service and give it back to the chair. >> thank you, senator portman. i'm trying to figure out where the decisions are being made as to the afghan infrastructure program at the department of defense. and the afghan infrastructure fund. now, it is my understanding in f.y. 2011, the afghan infrastructure fund, which is all d.o.d. money, is $400 million. is that correct, mr. sedney? >> i believe that is correct. >> all right. i am looking at a document here, and this is projects that are going to be built with this d.o.d. money. now, the first one is the power

generation in kandahar city, kandahar project. fuel operation and maintenance for all d.o.d. procured general yators in kandahar, $40 million, and the implementing agency is d.o.d. the next one is power transmission, and that is $231 million. that says department of state, usaid, one has d.o.d., and the next one just says department of state, usaid. the next one says power transmission, $86 million, and that is just d.o.d. the next one is a road. that is $23 million, which doesn't sound like surp to me

and that is d.o.d. the last one is governmental infrastructure centers. that is $20 million, and that is d.o.d. so who is deciding what d.o.d. builds and what usaid is building? who is making that decision? that cencom command making that decision, the stfs, and on what basis is it being made? >> first of all, for the purpose of the afghan infrastructure fund, and the reason it is funded out of department of defense funds, as my colleague, mr. thier has said, the commander on the ground has made the determination that our success on the battlefield requires both the reality and the prospect for certain economic inputs. the largest of those is electric.

kandahar and helmond provinces are the center of gravity for our ongoing campaign. that is where the majority of our forces were put into place. for general mccrystal and then general petraeus said sustainable energy supply was needed to defeat the taliban and in the population itself. the first step was the provision of these temporary power plants that would be fueled by diesel fuel. as senator portman pointed out, that is a very expensive, and as mr. thier is he, that is not sustainable -- >> i hate to interrupt you. i understand that all of these projects someone thinks are important to the success of our mission. i think what i'm trying to do is pull some thread here on

accountability. i can't figure out why department of defense is building provincial justice centers? why is that is not usaid? why is d.o.d. in the construction of provincial justice centers? i don't understand that. how is that decision being made and where is it being made? >> the recommendations come from the field through the chain of command on the provincial -- on the provincial justice centers, there are some areas where the provincial justice centers are so important that if it is not possible for usaid to fund them, that they are in this infrastructure. >> who is making the decision where the money is coming from? i feel like i am boxing goats. is it usaid that is responsible

for the assessment, which clearly has been lacking in some places. the language doesn't look like it has been taken seriously in terms of sustainability. it looks like to me somebody in the field has said we need to do it, and so we are trying to find the money in the budget to do it, and d.o.d. is going with it. that is not the way you carefully craft this expenditure of federal tax dollars. do you see where my frustration is? i can't figure out who to call? >> i apologize for my confusion that has been caused, but i would say the process has been much more rigorous and ordered than has been described so far. in terms of the afghan infrastructure fund projects, those projects were vetted first out in the field. they were based on requirements that the commanders in the field outlined and discussed sfwensively. this is a combined

civil-military effort, discussed with our colleagues at the u.s. embassy and the usaid. there are some areas where usaid were already working, where a large amount of the funds, 80% of usaid funds are in the south and west. but there were some projects in which the usaid did not have the money in which the commanders in the field identified as an urgent requirement. after discussion over which agency would be the most implements partner, then those requestssent back for approve of projects under the afghan infrastructure fund. those projects are recommended to the department, and then the final approval decisions are made in the department of defense. each one of those projects, which i understand were briefed

by some of my colleagues last week, do have a sustainability assessment in them. >> have you looked at the sustainability assessments? >> i have not -- >> i would recommend them to you, and i would love your input after you look at them. i have looked at them, and i don't think this is what we are looking for. it looks like to me somebody says we need to do this, and then people are checking boxes. and it looks like to me the military is deciding what projects need to be done, and if a.i.d. doesn't have the money, we find the money in our budget. how long has the afghan infrastructure budget been around? >> this is the first year. >> would you say this is an out growth of surp? surp on steroids? >> over the years as we encountered this complex environment, there were a number of areas in the field

where commanders saw a need that would have an immediate impact. they were put forward as projects -- >> we have never before -- this is really historic in ways. what we have done here for the first time that i am aware of, we have decided that in a military operation, we are going to do things like build justice centers in the department of defense. now, we did some of this -- there was obviously some cross policy nation in iraq, some that was helpful, and frankly a lot of money was wasted. tens of millions of dollars went up in smoke in iraq because what the military commanders thought they needed at the moment were not sustainability. power plants that were blown up, roads and bridges that were destroyed. and so i am trying to -- to you

believe that this is the new normal, that in contingency operations in the united states that the department of defense will have its own construction fund that will be commanded by the military leaders to determine what roads should be built, what power lines should be built and what justice centers should be built? >> first of all, senator, it is not the department of defense that determines which ones will be built. the commanders make recommendations -- >> it is your money. what do you mean you are not deciding what is going to be built? this is money appropriated to the department of defense. surely you are not telling me somebody else is deciding how to spend your money? >> what i am saying is we are not deciding on the whole complex of things that need to be gun in afghanistan. we are deciding which ones are of urgent military

necessaryity. it is a new concept. it does come out of issues with surp, they were tending towards things other than the quick impact projects. there was intensive consultation with congress on putting the afghan infrastructure fund into place. we created a new office in the office of the secretary of defense to oversee this? >> and who is that person? who is in charge of that office? >> one of my colleagues in our office of stability operations. i will get you his name. >> this is the kind of stuff we would have liked to see covered in your opening state, mr. sedney. we have a lot of projects that are being built. i know that this is a really

difficult environment, and there are all kinds of challenges, and our men and women have performed heroically, and our military leaders are doing an amazing job. but i do think we have played fast, loose and sometimes sloppy with the way we have spent this money. if this is the priority for the military command, then why isn't that transfering to make it the priority of the state department? why aren't we using the funds that has traditionally been always appropriated in this country for reconstruction projects? the expertise has always been at the state department. after the military pulls out of there. it is all going back back to the state department. what is happening with this momping of surp, i understand it allows you to short circuit some of the processes currently in place, and it allows you to jump the line in terms of burget priorities, but in the

long run it makes accountability and oversight very difficult. you're going to go out -- how many power projects do you have in the usaid right now in afghanistan? >> i would have to get you the exact number of individual projects? >> but more than a couple? >> not too many at the moment, but we have several. >> let me change the subject now and go to the kabul bank. i know this is difficult and in some ways delicate, but while we are pouring billions of dallas into the infrastructure of -- of dollars into the infrastructure of afghanistan because they have a g.d.p. -- without us, what is their g.d.p.? >> without us, i think overall it is about $18 billion. i think this 97% figure. >> that is the highest i have

ever heard for their g.d.p. when i was in afghanistan, i was told by people on the ground, including the ambassador, that the g.d.p. was somewhere around $10 billion to $12 billion. >> i think it has gone up steadily. i may be slightly overstating, but that was my understanding, that it has been growing every year. >> yes. >> sorry? >> i guess what i'm trying to figure out is we have got $900 million fraud that has occurred at the kabul bank. that is where we put international assistance for afghanistan. clearly we have technical assistance on the ground that is supposed to be overseeing the financial sector throughout usaid. can you explain how they were able to do insider lending to the tune of hundreds of millions of dollars that is now gone, and why we are not being more aggressive in terms of requiring the kinds of audits

that the other banks that are now in question that may have the same kinds of problems, the azizi bank, why we are not requiring independent audits before we put any more money in those combangs? >> let me clarify something. no us taxpayer funds have gone to the kabul bank. >> no i.m.f. funds. >> i can't speak to that. >> you say no funds have gone to the bank. if we are paying contractors, and if we have blown their g.d.p. way up beyond where it will ever be. you say it is is not united states money, but i would hasten to add that a lot of the money is american. wouldn't that be a fair

assessment? >> there is no program that has existed in the past that provides any kind of support to kabul bank. what we have done as a government is his to support the afghan's government's ability to develop its financial system. that has primarily been involved in, offense, building the afghan central bank from nothing into an entity. part of that assistance has been to build their capacity. i hasten to add that at no point has the u.s. government, efficiency or contractors been responsible for the oversight of afghan's banking system. that is a sovereign function of the government of afghanistan. we have attempted to build their capacity. on the other point about the azizi bank and the audit, not only do we support that idea, but we have been demanding it. part of the i.m.f. conditions for a new i.m.f. program that has been designed around the afghans rectifying the problems

in kabul bank has been that a fencic audit needs to be conducted, and that the i.m.f. program require that audit to be conducted prior to a new i.m.f. program being put into place. i do want to emphasize that about agree with you strongly that an audit needs to be done as well as other steps, conditions that have been endorse by the u.s. government before any i.m.f. program goes forward. >> thank you for that, and we will have some follow-up questions on that. let me finally -- a couple of things finally i want to do. i have had many conversations with general petraeus on on the senate armed services committee and others about that. do you have in the department of defense an analysis of where that money has been spent in relationship to where there has

been challenges in sermons of our military mission and what kind of success the cerp funds have fact brought about? is there data? >> senator mccaskill, i do not know of any study yet that has been done on the connection of cerp funding to military success. while we have repeated statements and validation from commanders in the field as far as i know, and i will check and see to make sure, there has been no study trying to validate any statistically valid correlation between cerp spending and military success. in afghanistan, since we are still in the process of developing -- or achieving that success, my view would be it would be too soon to make such an evaluation because we are still in the process of carrying out the war.

>> well, we have done cerp now for as long as i have been in the senate. so we have got lots of cerp money in iraq and afghanistan. this is my specific question, and i would ask you to take it for the record because i want you to be sure before you answer this question. my question is does the department of defense, does the american military, have data that would lay over where cerp money has been spent versus hot spots to determine whether or not the cerp money is actually being spent where there are areas with hot spots in relation to the mission. if so, is there any data available about the success of that cerp money in terms of helping directly with the military mission other than anecdotal. >> in terms of the first part of your question, we we do have data in terms of cerp money

spent and its value. the second part of the question on afghanistan, the area i am responsible for, i don't think we have the data because we are still in the process of carrying out the fight. on the first part of your question, we have data to provide to you. on the second part, i will consult with my colleagues on doing a study on excessive cerp is something we want to do now or later. >> i did not do this particular study on cerp, but i do know we did make a recommendation along the lines of trying to measure success against some set of standards and metrics. that was in a recent report. the department did concur with that.

there is a recommendation out there to do that, and the department has concurred. >> to do a study to get a sense of the efficacy. >> yes. >> essentially we have moved beyond cerp into much bigger projects on a.i.f., and it worries me that we have done that without checking to see if cerp was a success in terms of the mission and whether or not the afghan people -- i mean i don't mind that the afghan people -- i understand they need power. i understand that it would be nice to have the lights on. but i need to make sure that spending hundreds and millions of dollars on a power grid and power system in afghanistan is in fact going to translate into defeating the taliban. it is nice that we turn on the lights for them. but it would also be nice if we got more broadband in missouri. those are the kinds of decisions we have to make.

i worry that the blinders get on, and we lose perspective about whether or not these projects are essential to the mission of defeating the taliban and providing stability. i'm not quarreling that we have to train the army or the police , but i just think it is time for us to really button down whether or not building the roads that we are building, and building the schools that we are building, and building the justice centers that we are building, and sometimes usaid is building them, sometimes the department of defense is building them. is the army corps taking the lead on all of these a.i.f. projects? >> i know they are taking the lead in at least one of them. i can get back to you with who is on the lead. >> and i assume all of these are being contract out? >> we are in the process of doing that, but yes, they -- it will be contracted.

i will have to take that question, ma'am. >> all right. i have a number of other questions in here. you have stayed long. this hearing was supposed to be over at noon -- what? sorry. i've got to ask about counternarcotics before we go. we released a report. the committee released a report, mr. denver, on counternarcotic reports in afghanistan. it dealt with all the counternarcotic moneys we have stephen -- spent and the problems there. first for mr. denver, what have you done to improve the management of the counternarcotic contracts there? if you are not prepared to answer today, we will take it for the record? >> i will need to take it for

the record. i will need to coordinate with them and get back to you. >> usaid, mr. thier, since 2002 has awarded $1.4 billion for alcultural -- agricultural farmers to grow something other than opium. do you have any real measure of the impact after these programs, and will any of these impacts be sustainable in terms of the alternative agricultural programs. >> to fundamentally answer your question, yes. this investment in agricultural, which has been finding alternatives for people who have been growing opium poppy, has been dramatically successful in two regards. first, a large number of provinces have gone opium-free.

that is a major parts of our strategy in eliminating opium production in afghanistan. there really is no silver bullet to replace opium in afghanistan. what we are trying to do is create an agricultural mix and market to allow farmers to be able to make a decent living so that the choice to plant opium will be far less attractive vis-a-vis other efforts. we have reached literally tens of thousands of farmers with these programs that have increased crop yields dramatically. i do think it is a long-term investment because they are able to generate seed, opening up new markets. we are nrking trade across the border as well. it is a critical part of our ultimate sustainability strategy for afghanistan to increase agricultural income. >> i think it is a terrific program. we have a national guard unit

over there doing agricultural work, and we lost one over there in that program. let's talk about d.o.d. and usaid. we have spent $2 billion in counternarcotic contracts in afghanistan. can either of you speak to any milestones that have been reached in terms of having a negative impact on narcotics traffic in afghanistan and exporting out of afghanistan after spending $2 billion? >> our focus has been on the crop replacement side. our departments are responsible for the elements of interdiction and law enforcement. our efforts have really been, as i said, to find replacement crops. one of the most significant factors that i noted is that a large number of provinces that were planting opium a few years

ago have gone poppy-free -- >> have we measured the amount of opium being produced each year in afghanistan, and where we are in that metric? >> we don't do that, but there are intense measurements done on a year by year basis of the opium crop produced. there was a dramatic deadline last year due to blight, but i think due to other programs as well. >> maybe we need to figure out that blithe. work the blithe -- blight. maybe it would be less expensive than $2 billion. i want to get from your colleagues what milestones we can point to that this investment of $2 billion has been a wise investment. the alternative crops, if we can show, one is going to prove the other. if you are not the right person, we will try to pose questions to the right people

if you will help us find them. mr. sedney, you may not have been the right person, but we struggle with the people. i will close with this. it would be great if i could get the right people in front of this hearing that i can hold accountable on contracting in afghanistan for infrastructure. but it is harder than it looks to find the right people because it is not clear who really is making the decisions at the front end as to where the money is going to go, the decisions in the middle as to the contracting process, and the decisions at the end as to whether or not we have done an adequate job assessing stateability. -- sustainability. i look forward to the input. you are going to continue to hear more and more questions in this area as we try with all of

our might to find every taxpayer dollar we can in terms of spending less. i am not here to say i don't support the mission in afghanistan. i do. but i question whether all of the money we have spent on contracting in the effort against counterinsurgency, whether we have gotten any value for it. in terms of where i sit in terms of contracting oversight, i think the grade is not a grade in terms of the amount of money we have spent and what we have gotten for it. we will have questions for the record. >> may i add something quickly? >> yes. >> while our work focused mostly on the oversight of contractors at d.o.d., as we looked at it, some of the outcomes you can have is poor construction. as we talk about sustainment, you can't assume what we have out there is already ready to

go in terms of people going in and using it and being able to sustain it. what you also have to look at is what is it going to take to possibly rebuild and reconstruct facilities that are already there. some of our work has shown that a lot of these buildings out there, particularly on some of these bases, are not really to be moved into it. as you think about sustainment, you have to think about are we ready to move folks in? what is it going to cost to reconstruct those buildings. >> you are right at the back end. we have the front end, deciding where the money is going to go. we have the middle portion, which is letting the contracts in a cost effective way and overseeing the contracts. then at the back end, who do we hold accountability -- accountable if the structures are substandard, if they are not going to work for the purposes intended. that is what we saw so frequently in iraq. some of it dealt with the safety and security of our troops in terms of the construction that had been

done. other was construction -- you know, the health centers are a famous example. somebody god paid, and the ones that were built were not capable of being used, and the ones that weren't built, we never got the money back. there is a disconnect in the field between what the commanders want to have happen and what actually happens. the money that is spent from that point to that point is where we can save billions and billions of dollars if we really work at getting this right. i do -- it is better. the cores are better. they are not being trained. when the idea for the war contracting commission was an idea that i came up because i am a student of history and what hairy truman did -- harry truman did in world war ii, and

we worked hard in getting that contracting commission established. we are a long way from where we need to be. and i want the department of defense to take this really seriously, and a.i.d. to take it seriously. what is going to happen is the american people are going to turn off the spigot if we don't do this right. they have a right to turn off the spigot if we don't do it right. if all of you would just study the work that g.a.o. has done, we could make huge progress. but somehow that doesn't ever happen. it is painful how long it is taking to get the accountability we need and to get the accurate information. while continue to foul with the new secretary of defense on this. he and i have discussed this. i have had many conversations with commanders on this subject matter, and everyone nods their head and say they get it, but it is not getting done. thank you all very much for being here today. [captions copyright national

cable satellite corp. 2011] [captioning performed by national captioning institute] >> here's what we have coming up for you on c-span. up next, a congressional hearing looking at the democracy in the americas. and then a pair of segments from today's "washington journal," looking at the national debt and the federal deficit. we start with david keating, who offers the republican perspective. that is followed by blanche lincoln with the democratic view. >> looking ahead to our prime time programming, coming autopsy at 8:00 eastern, we

will feature henry kissinger as they take part in the monk debates. it is a bi annual event in toronto. that gets underway at 8:00 p.m. eastern here on c-span. our companion network, use, starts its prime time programming with a review of federal regulations from the brookings institution. that is at 8:00 p.m. eastern. about a half hour later, we will have more from the brookings institution with a forum on innovation and the u.s. economy with an emphasis on science and technology. former white house economic advisor lawrence summers takes part. about an hour later it is the national organization for women's conference, featuring former colorado conscience woman pat schreoder. that is at 9:30 eastern. >> tune in this independence

day. we discuss if the united states can remain united. >> at the political level we are more divided. if you look at partisan polarization if you look at that, than any point since the reconstruction. >> they talk about religion, violence and the death party. insiders in the white house discuss the president's foreign policy. this july 4th beginning at 10 a.m. eastern. for a complete listing of programs and times, go to c-span.org. >> this fourth of july three-day weekend on american history twonch on c-span 3, we will visit the smithsonian museum to learn about an expedition to cirque navigate the globe. and their treasure, 40 tons of specimens, which became the foundation of the smithsonian institution. former first lady, laura bush, on her time in the white house, planning her husband's presidential library, and her

memoir. and then a panel discusseses j.f.k.'s relationship with the press. get the complete schedule at c-span.org/history. >> now to a senate hearing on democracy in venezuela, cuba and mexico. witnesses include deputy assistant secretary of state roberta jacobson. new jersey democratic senator robbed menendez is the chair. rubio is the ranking member. >> this subcommittee will come to order. let me apologize for starting a little late. as we celebrate the 10th anniversary of the signing of

the o.a.s. inter-american charter, i wanted to commeen a hearing. to highlight where it is strong as well as areas where there is progress to be made. all the countries ntsb region adhere to a democratic form of government. we celebrate that achievement, and we seek to further solidify the pillars of democracy, fair and free elections, the independent operation of the branches, and a judiciary respect yul of society and the ability of the press to operate freely. as we have made progress in our country during 200 years, so has latin america. in the 1980's, we saw dictatorial rule, now the norm is competitive elections that are free and fair. we see transfers and power and all nation of power between parties of the right and left.

brazil, chile and others have made strides in democracy over the past 30 years. chile rated a country as not free in 1981 is today rated as free. likewise, brazil rated partly free in 1981, is rated free today. in total, freedom house rates 22 countries as free and 10 as partly free. so there is work to be done among the countries that are partly free in bolivia, colombia, ecuador, gauts mall, haiti, honduras, to mention a few. but in most cases, the friends are positive. of particular concern are those countries that were rated as free in 1981 but are now only rated as partially free such as in venezuela. let me mention a few concerns of mine. one of those is the tendency towards centralization of

power. in 1980, the military in many countries ruled under author tehran rule, issuing decrees, instead of elaboration of laws. today the trend is toward of extension of term limits. we see it in several countries. in guatemala, the presidential candidate took an unusual route to ensure his ability to run for president. she wanted to marry her country. perhaps such a move is technically legal, but it cirque vents the spirit of the law. even colombia passed a law to allow a third team for its president, but the supreme court ruled it unconstitutional. a second concern is the right to criticize one's government without fear of reprisal. in some countries, the voice is

physically restrained, whereas in others the effort has become more opaque, using laws to frustrate, constrain and undermine the operation of civil society by imposing barriers to prevent their registration, operations or access to resources. the most strident case in this regard besides cuba is venezuela. the venezuelan assembly passed legislation that restrict organizations that defend political rights or monitor performance of public bodies. the law is in direct violation of article 13 of the u.n. human right defenders that quotes everyone has the right individually and in association with others to solicit, receiver and utilize resources for the impress purpose of promoting and protecting human rights. a third concern is that of

freedom of expression. in central america, journalists that cover drug trafficking, corruption and organized crime face danger to their lives that results in self sensorship. today i hope to hear from our witnesseses on what we are doing and what we can do to preserve and deepen the gains that have been made, and what we are doing to foster strong democratic institution's respect for civil society and the media to enensure on the 20th anniversary of the interamerican democratic charter, that all nations in our hemisphere will share in the benefits derived from a vibrant democracy. let me turn to the ranking member, senator rubio yo for these remarks. >> thank you, mr. chairman. these are important hearings. a stable western hemisphere is

crucial to the united states' steast, and it is in the interests of the world. there is a lot of good news to report, and we will hear that in the testimony today. four nations i would single out as examples of the promise that the western hemisphere has in the century. colombia, which has overcome violence, continuing on the path. we are all excited about the path colombia is headed. we hope we will have a free trade agreement with the people of colombia that will further strengthen democratic institutions and brighten their future. chile is another nation that continues to prosper as it embraces market economics. brazil is emerging into not just a regional power, but increasingly a global one. we hope they will continue to grow in that role and exercise its influence to other nations in the region as to how much promise exists when you give

your people freedom and economic opportunities. and mexico, despite significant struggles they are going through right now particularly with criminality, their democratic institutions have taken root and we hope they will serve as an example to the region. there are other stories that are not nearly as bright, and they continue to be a blemish on the western hemisphere and sadden us. the first is venezuela, who is governed by a clown, more appropriate for a circus than someone who governs a country. he has illusions of grandeur. he views himself as a world leader. he is not. he is increasingly i will relevant in the region. more importantly, i feel sorry for the people of venezuela. he is an embarrassment to that country. it is a people with a tremendous trment of belief and it is being held back by

incompetent leadership. we hope that will change soon. nicaragua is being run by a relic. the guy has made a come back. i don't know how. unfortunately, nicaragua is being held back as well. the people deserve and can have better. and then cuba, which is not just a repressive regime, it is actually a injuresic park, run by 70 or 80-year-old men. they are not just tyrants. they are incompetent. they don't know how to run an economy or a country. we hope to be a part of seeing a change happen there sometime soon. there is a lot of good news in the person hemisphere. there are at least four examples of bad news. we hope that will change, and god-willing, that will be what the united states can play a role in bringing about. thank you. >> with that, let me welcome

roberta jacobson, the deputy assistant secretary of state in the bureau of the western hemisphere. most recently she served as deputy assistant secretary for canada, mexico and nafta and deputy chief of mission in peru. we appreciate your long record of service in dealing with issues in the hemisphere. glad to have you here. we recognize your new jersey roots, which adds value. somebody raises their hand there in the back. and along the way, we appreciate what you have done. now i would ask you to synthesize your statement for about five minutes or so. your entire statement, written statement, will be included in the record. with that, madam secretary, we are happy to hear what you have

to say. >> thank you, mr. chairman, ranking member, i am delighted to be here today. thank you for the opportunity to appear. i would like to start by saying that we share your assessment of the important successes in many societies in lateral irn america and -- lats inamerica and the caribbean. that success is measurable in rising levels of freedom, graret economic prosperity and increasing global integration. these factors work together to generate vast opportunity. they strengthen institutions. they have helped list scores of millions of people out of poverty in the last decade and in the process brought forth huge pools of talents that are transforming very towers countries. yet there remain significant weaknesses in democratic institutions in much of the hemisphere. so we must use this opportunity to secure an deepen zphockization. this requires active u.s. engagement, but it hangs fundamentally on partnership

with our neighbors and the actions of both governments. the democratic values we seek to advance are shared ones, and the democratic charter strengthens our hands. in some countries, democratic space is being rolled back. the criminalization of dissent, disrespect for the legitimate role of minorities are our principal concerns in this regard. in other nation, persistence in equality and in gangs and cartels threaten games. and cuba remains a threat. i have mentioned in my longer statement many of the examples of leadership that we see throughout the americas. many of which you have already mentioned in your review. we have seen veterans of chile's democratic transition

go to cairo about advancing reconciliation. the canadian prime minister has made gains. colombia is working with central american nations to bolster citizen security, and there are others. we are working with governments in the region. the interamerican commission on human rights to address the needs of vulnerable, traditionally margin alized grooms. we view the defense of these human and civil rights as key to the advancement of the region as a whole. we are steadfast in our commitment to four initiatives. the central america initiative, the caribbean basin, and the colombia strategic development initiative. our programs focus on reinforcing the rule of law and

strengthening regulars lutions to bring security to all people. last week, secretary clinton let -- led a group which brought together heads from central america and meck and leaders from around the word. hero efforts to harmonize our activities with those of our partners follow up on the president's commitments during his march trip to latin america. she went to jamaica and met with the leaders there, where she underscored the importance of energy security, the climate partnership and economic and democratic development. we are also active in the face of challenges posed by leaders who seek to consolidate power in the executive branch through extra constitutional means. it is not always easy to work positively with civil society when governments seek to limit

our presence. because we respect the rights of people in all societies to choose their futures, we stand steadfast to rights and freedoms. in cuba we have taken steps to help the cubans people live the lives they choose. well tin to -- continue to support dissidents. we want to open the way for support of cubanses who are striking their own path. we are particularly concerned about venezuela as president chavez continues to disrespect the legitimate roll of democratic institutions, and closing press outlets, and using the judiciary to persecute opponents. they have concentrated power in the executives. we have pressed the nicarauguan government to enhance prospects for free and fair elections, though we fear this process is

closing. others are on complicated trajectories and have limited the scope of our bilateral relationship. i have mentioned the importance of our charter and continuing our work with the o.a.s. as we have done recently and successfully in haiti's elections, and honduras' readmission to that body. this is the backdrop to our intense diplomatic engagement in the areas. i look forward to working with you and your colleagues as we work together to make gains in our hemisphere. >> thank you, madam, secretary. let me start off. perhaps one of the greatest and least commented on threats -- you know, democracy to me is more than elections. elections is one element of a democracy, but in and of itself, elections without all the other aspects of what we would consider a democratic country, an independent branch

of government, a judiciary that is honest, and a legal system that is transparent, that observes the rule of law, those are all elements in my mind of what a democracy is all about. not ensuring that you don't have the manipulation of the constitution to be able to continue to stay in power, which increasingly is a reality in the hemisphere. but civil society, maybe one of the least commented threats in latin america is the silencing of civil society. the power of civil society to turn the political view and to expose what some would prefer to be hidden makes them a target. that repression is not always as vivid as we may see in a country like cube. but the harassment of an activist, the discreet forms of rules and regulations that control the ability of civil

society and organizations to function, to receive funding to operate peacefully in their country for change is in my mind under siege. venezuela is a great example of that. how closely does the department follow this issue, and in your view, which are the most difficult countries for civil society organizations to operate in? >> thank you, mr. chairman. i think that was an extremely eloquent review of the critical importance of civil society in democracies. without civil society activists able to work freely, one really can't talk about fully functioning democracies. we have made it very clear that we think that that includes all kinds of civil society groups, from opposition political parties to an independent press , a functioning trance parent,

-- transparent fair judiciary and the ability for folks to organize around any subject and present their views to the government and be heard. we pay a lot of attention to civil society. it is a huge part of what we do in the state department, engaging with civil society. the secretary has made that a key part of her platform, engaging in town hall meetings, making sure that she takes about the voices in civil society that need to be heard as well as speaking with governments about their views. i thinkthroughout the hemisphere to risk situations and it is difficult for me to say which countries might be those in which we have the greatest concern, but we have an outspoken and our concern about the difficulty of civil society acting and organ as i -- and

organizing in venezuela and grow. we are concerned about the ability of the press to operate freely in many countries in the hemisphere, either because those freedoms may become pinched on by governments or because those freedoms are impinge upon by criminal organizations threatening journalist. we know the hemisphere has become a dangerous place for careless. we believe there are lots of things we need to do as a whole in the hemisphere to advance civil society. >> let me pursue that. the department spends a lot of attention on this, and i hear the secretary is engaging civil society and conversations, meetings, those are all desirable. what more are willing to help civil society in the hemisphere to empower them to have the abilities to try a to perfect

democracies in their countries, where there is a democracy, or the absence of one, to try to help to create a democracy? >> there are a number of ways, and what is the bullet out -- a bully pulpit. the other is to engage in programs where the money she programs have increased, especially in the security initiative i mentioned were a good deal of our intention is not only on improving government institutions to make them in working with non-governmental communities in civil society in resisting with criminal organizations and been able to channel their views the government. the other thing that is important is the use of new technologies and new media, making sure that we are and a

clean citizen activists to speak out. the alliance abuse movement we have promoted throughout the hemisphere works extensively with young people in organizations that our community based and use digital media to get their message out. it is a combination of some of the more traditional forms of assistance, programming and assistance to our foreign assistance budget, but also exchanging programs, educational programs, new media. >> that the more the -- let me be more direct. it seems to me that there was a time in our country when we were aggressive about promoting democracy throughout the world, and we were very engaged and we did not take the pushback of authoritarian governments to deter us from pursuing that. it seems to me that in some places in the world we are doing

that -- i was reading an article where we have an internet in a briefcase and how we are traveling in different places to help societies have access so they can unlock their potential of communicating with each other hal. yet i get a sense of reticence when we come to places like cuba where, instead of actively engaging in helping civil society in a very meaningful ways, to be able to have all of the wherewithal that we want in other parts of the world, the arab world, iran, yet we come to cuba and we have this reticence and there are some who would undermine the purpose of our

democracy and civil society programs in a country that is clearly by all standards the most suppressive in the entire western hemisphere. i think when entities or governments, particularly of authoritarian governments, are going to push back whether it is national endowment for democracy, iri, programs that that cannot be the basis upon which we now abandon their rigor -- the rigor that i want to see in this hemisphere in helping civil society. i am hoping that the administration and the state department will be more vigorously engaged in helping society regardless of the pushback we get from across chavezes, all those entities for a castro regime, because if we

are responding to pushback, they will have achieved their goals, and we will not have the wherewithal to help those who risked their lives degree greater democracy within this hemisphere. it is an enormous value to us as a country, not even about doing the right thing. democracies are less likely to create armed conflict against other democracies. they are more likely to permit the type of economies that can help grow and help their citizens prosper and create greater demands by their citizens within civil society. i hope that some of the things that i see as a concern in terms of our democracy programs in this hemisphere, we are going to turn the course and move more aggressively ahead. >> thank you, mr. chairman. that is exactly right, and what

i was referring to in my opening remarks, we face challenges in implementing this program of bringing information to people, ensuring that access to information, but those challenges should not deter us from up holding the principles that we completely agree with and trying to ensure that people have greater access to that information, are able to but project their voices out word and receive the voices of people around the hemisphere and at around the world. >> i appreciate that we face challenges, and we had challenges in poland and challenges in what was czechoslovakia before it became the czech republic, and in other places in eastern europe, and we did not let those challenges deter us from our vigorous engagement in the - 3 programs. senator rubio? >> thank you for being with us this morning and for your

statement. i want to talk about something that we do not talk about very often that is relevant, trafficking in purses. report came out on monday that as it may cuba as a tier 3 countries. u.s. law had its funding for officials or governments can tier 3 countries until they make efforts to comply with standards. that is not the direction that we're heading with regard to cuba. how is the administration costs exchange program with cuba complying with the restrictions could what is the calculation of aside from political realities, this trafficking in persons issues is a major one around the world. cuba is one of the countries that refuses to comply with it and is a significant player in

trafficking of persons and on willingness of our debate -- and unwillingness. >> in our exchange programs, our goal is to work with society, as reflected in the comments, the reference to the legislation that refers to the exchanges that might involve government members. that is not the case with cuba. we tried to do programming to bring people to be united states who are non-governmental, to have exchanges that our people to people civil society focus. that is where we will continue to place our efforts on civil society and on people to people , and it is unfortunately that we have not seen cooperation on trafficking in persons issues which is a serious problem throughout the hemisphere. >> what goes into the

calculation that somehow we should waive requirements when it comes to cuba, that we would not do with some of the other tier 3 countries? >> i am not aware that we have waived the requirement for cuba in terms of exchange programs, and i would have to get greater information on that. >> the programs we haven't you not violate -- are they not in contradiction what all loss as to which it not be dealing with countries that are in the tier 3? >> the exchange programs that we have, such as they are with you but, i believe focus on civil society. i would have to get back to you in further detail as to whether there are any government officials involved. >> the reality is it did require that all forces available for countries are not apply to cuba, and it is outlined in the

report, and i apologize for not pressing that question earlier because you have a broad array of issues to be prepared for. i just wanted to make the mark that that is an issue we are interested in general and am interested in why cuba went in a different direction. on venezuela, in elections last year, there is now lives event but divided and severely restricted opposition in parliament. i was interested if the state department has thought about any programs that help venezuelan parliamentarians share -- >> we have programs in venezuela that are directed at a non- partisan fashion of trying to work on the democratic process these, opening up democratic

states. i would need to find out if we have specific programs for parliamentarians. i am not aware if we keep that in venezuela. over all, our general goal is to work on democratic leadership, and that may include any members of opposition political parties, and indeed, members of any political party that are democratically based in venezuela. we want to work on the processes of government that are not partisan. we noted the opposition's presence in parliament and there are important issues that they are taking up at this time that deserve our attention. >> to highlight, it is a positive development that there is an emerging opposition -- minority party in venezuela that is in opposition to the policies of the government that had a legitimate voice, and we should

explore whether it is to non- governmental organizations -- oftentimes it undermines minority parties by saying they are somehow being controlled by the light stays. but and power than with the ability to be more effective, because of heart from abuses and ridiculous hats on the part of leaders of that country, he is also in caught it, and part of being the minority party in parliament is being able to appoint his policy failures and how and as willie could be doing so much better. last question involves quite a lot. it is dated may 24, from the supreme elections tribunal, and what they ask for requesting international observers for the upcoming election. you may not be aware of them

asking us apart as they as a group of observers for their upcoming elections on september 11, 2011. our review aware of their request, and are you hurt asked the state department for art as a patient under this request? >> we support the work of the tse, the electoral tribunal, and we have made it clear we're concerned about that tribunal's pressures and threats that have been under, and it is important that those elections be carried out in a freeway. we will be working with others within " ramallah -- guatemala. >> i want to answer this letter. can we talk later about whether the state department would be

willing to solicit american organizations to participate ias observers in there and elections? they are looking for an international supervision. i would encourage the state department in bringing about organizations in the and i did states that would be willing to go to guatemala and observe a lexus. >> thank you. >> it is interesting to note disqualified -the former first lady from running. they are taking some very courageous positions as they continue withstand it. on the question of freedom of the press, which is under attack in several countries in latin america, in some cases by

governments, and other cases by threat of violence through private actors, venezuela's threatens those who criticize the government has attempted to control the stock of a newspaper critical to the govern. in mexico and honduras, reporters who did reports on government corruption or of authoritarian rule are at stake freddie does the department and our missions place supported independent journalist and providing them with the space to share their views and publicize their opinions? ission interceded in helping those journalists who've >> they do, senator, and we are concerned about the trends that you have outlined. it takes different forms in

different places. in mexico, we have a program ngo's and howgo' they can avoid pressures and dangers that criminal resistance put on a fair reporting. in honduras, we have helped the government set up a special task force focused on crimes that have been committed against journalists. we have ensured that we have robust exchange programs for independent journalists so they can share experiences and learn from other journalists. there are a variety of ways. there were two resolutions

passed, not always easy the issues focused on. we have given monetary contributions because we work is critical in this area. there are a variety of means we use to try to promote and protect the vibrant media in these countries, and we will continue to do so. >> with the oas charter, what can we do to help it strengthen its result in pursuing enforcement of the charter? hink --e >> i only ask excellent questions. >> what we do with oas is try to support with allies in the hands

hemisphere.m the region came together as a whole tax on concerns and threats we are seeing to democratic process these. it is not always easy to get that consensus to work in all areas, and we have to continue to refer to the charter and to make the charter real through programs and actions by the oas that bring that chartered to life in individual cases. we have seen over the years that the oas has been able that act and reverse threats to democracy, beginning with the and ation in brperu

commitment years ago. it has not always been an even times whene are there have been threats to democracy when they have not responded to threats as we would of like them to. working with member states as the 10th anniversary of purges to strengthen and highlight those parts of the charter that the implementation. >> a brief statement. as an american, people run for office and they say things for domestic consumption, and then when they are elected, they become pragmatic. we saw this in brazil, where the president, when he ran, he

described theories in the past that once he began to govern he could not fully embrace, and took his nation much farther down a pragmatic road. brazil is now becoming a global power. i watched with great interest what has happened in peru. there was rhetoric in the past, but the new president stated his intentions with respect to their democratic institutions. first, he distanced himself from previous support for policies followed by chavez and others and praised brazil as a model. do you have impressions of the chair on the future approach, because i hope they are on the verge of joining that list,

brazil, colombia, mexico, they can be successful in the challenges they faced and others like chile. are your general impressions about the hope there and the hope of our engagement with room in a positive way? >> another excellent question. >> i got it from the chairman. >> it is a terrific example, and you mention all the countries, many of the country's, i should not leave out others, perhaps. we had positive relations with countries moving ahead on reducing inequality, increasing social and closing, strengthening the market place -- strengthening democracies. our view of the president's election is we want that the best possible relationship with him. we have congratulated him on his

victory and said we look forward to working with him. we have important interests corot, continuing to work on counter-narcotics issues, ensuring that economic prosperity reaches further than it has so far, and we want to have the relationship you have outlined, a positive partnership program, and we are optimistic about that. >> let me thank you very much for your testimony and response to our questions. we look forward to continuing with you in the days ahead. let me introduce the next panel. michael reis the editor at "the economist." he has become one of the world scar authorities -- world's

authorities. he sought to shed light on what many people thought had become a forgotten continent. jorge dominguez is the professor for the study of mexico, special adviser for international studies, chairman of the harvard academy for international area studies. i hope you get paid for each of those, doctor. he is the author of a number of books, and we appreciate your willingness to interrupt a visit to be with us today and we'd look forward to your testimony. dan fiske is the vice president for policy and strategic planning at the international republican institute.

at the state department he served as deputy assistant secretary of state in the bureau of western hemisphere affairs. we welcome you back, dan, to the committee. let me invite each of you to make about 5 minute statements, and your full statements will be included in the record. we will start with you, mr. mr reid. >> good morning, and thank you for the invitation to be before you today. as an observer from latin america, i think asks a rare honor. mr. chairman, latin america has never been as democratic as his day with one exception, cuba. over the past decade the region's democracies have been

sanctioned by great economic progress. faster growth means many more people have left poverty. most countries successfully navigated the financial crisis and the past two years have seen a strong economic recovery. the extreme inequality that has long scarred land america has had a series of negative consequences. these positive trends are achievements of democracy. personal safety nets are much improved. the steady expansion of the years of schooling in the region has helped reduce inequality. latin america seen a growing

middle-class. this progress has brought greater stability. eighth elected presidents were ousted before they ended their term before 1995. democracies region's face many difficulties. cars means improving public education. crime is one of the most serious concerns in the region. outside conventional war zones allow latin america is the most violent region on earth. criminal organizations challenge the role of the state. prevalence of violent crime is the consequence and calls of the weakness of roll call in

american countries. despite attempts to reform, judiciary he's remained ineffective and corrupt.

that is because chavismo has failed. economy has lagged in the past two years. eru's symptomatic p president-elect is looking toward brazil.

an example would be this with the approval of the free trade agreement with columbia. the most effective means of weakening the elected autocracy in my view, what bilateral diplomacy, working with governments in the region and, thank you very much and i look forward to your question. among thank you very much. it is an honor to be here. in my remarks concentrate on a point my colleague just need -- just may, that most latin americans live under constitutional democratic governance. that is why i spent time in my

written text on brazil and mexico because that is where most latin americans live, and i was delighted to hear an earlier comment comparing results and her room because that is how my testimony begins. i look at the example of the 2000 to presidential election to indicate the key points that the senator and the size, the key role of transfer of power from government opposition, the shift of the political hues of the candidate who wins the presidency, significant ways that harding from his past, a candidate who has been described as a rabble rouser earlier in the past, the fundamental continuity and it was the policies and -- of the outgoing and incoming government, and the things of a civil society. in your previous questioning

ahmad, he asked about international factors. the 2002 presidential election is a good example and result of her role of the international community, including the u.s. government. because was perceived as a rabble rouser, there was panic, and there was an effective intervention of the u.s. government and the bush administration at the time that helped to stabilize those economic circumstances, enable brazil to have an election, and to have a good partnership in the years come. it is in that context that i only look with hope at the peruvian election where the president-elect has indicated a shift of views, even imported

brazilian advisers to try to make this more credible, but bearing in mind that lula and amala are not the same. lula had never associated his views with chavez. i pay attention to the mexican 2000 elections for other reasons, the role of the mass media that interests you and the committee, their role of the electoral institutions that is equally crucial, the role of the president the political parties highlight why i do so. on the opposition side, which is one of the leftist i draw from venezuela, it was essential for the long running opposition party to believe that it could win, and therefore, not to

shrink away from contesting the elections, not doing with the opposition. in december 2005 to abstain, unable chavez's political forces to retain every seat in the national parliament, to leave means you can challenge the electoral fraud, with others which is the next point i want to make. the mexico 2000 presidential election was one of many where international and domestic election observers were important. it included the ndi, the iri, or chatting before about that election, and it is one of the seven ways -- significant ways there is an important role for the international community. on the international side, the clinton administration signaled, along with wall street and

other markets, that the key was a good election, not for a candidate to win it, and that was effectively committed a kid. i want to underline my agreement with the things you both have indicated, with regard to venezuela. the issues there are not just whether one agrees or agrees with china's, but the polarization of the lead for all institutions, the aggressive and the intimidation of the press, including the shutdown of independent mass media organizations, the grass of undercutting other rights of civil society, both under international human rights conventions and their own constitution, the intimidation of opposition political leaders, including potential presidential candidates, and the abuse of executive decrees. it is as noted, about to be the

10th anniversary of the inter- american democratic charter. it remains a viable, valid, and more effective had become difficult as it is, a crow rate as it is, to a coronate u.s. policies and the work of allies and friends through a multilateral institution that is at times cumbersome, but the most effected path we have. fahey. -- thank you. >> thank you for the opportunity up to raise. the international or of an institute has to implement the programs in latin america. we are in 11 countries. this is the 10th anniversary of the charter. history provides a reminder that u.s. interest are connected to the state of the mayor to see in

the americas. over the past 30 years we have witnessed a broad acceptance of the elections and other practices as the means to select leaders relativize government allow party. of the fact is, more of the region of citizens are participating in decision making of their respective countries than ever before. this is not argue that some form of democratic perfection has descended on the hemisphere. it is to note that the acceptance of democratic practices are a foundation of citizen expectations throughout the region, regardless of whether individual leaders support or fully implement such practices. there are exceptions and challenges to this general house of growth of democracy,, uncontrolled crown, populism, and i would identified these as the two most significant challenges.

the role of order and law are fundamental to a country house democratic health. these terms can also be misleading, as in the case of cuba. that nation has a constitutional order and a body of laws, but remains the anti-democratic out liar. the deepening of democracy requires a constitutional order that for tax rights of individuals, provides for responsible division of governmental authority, and promotes respect for the rule of law. over the past decade, we have seen instances where constitutional changes have undermined in democratic institutions and concentrated power in a single office or person. constitutional order should be neutral, not an enshrinement at any particular political tendency. it should include an streets of governmental action, not just limit the range of citizen behavior. as for the rule of law, too many

countries suffer from an arbitrary application of the law, not from a lack of loss. in some instances is, the law is dysfunctional by design. generally, by the design of a small segment of the population who seeks to empower and enriched itself at the expense of others. this is at the core of what is called populism. this also contributes to a situation of democratic uncertainty. regardless of the past reasons for the state of affairs, democratic practice remains most successful where there are competing centers of government of the arctic, where civil society has an opportunity to meaningfully engage decision makers, and where the media can vigorously report on actions of those in office. venezuela is the region's poster country for the challenges that confront the consolidation of

the democratic society. chavezj 's government has eviscerated the responsibility of other independent bodies, including the national legislature. we share the open question on what happens with her room. by comparison there is columbia, where a popular president stepped down when a third term was deemed unconstitutional by and under constitutional judicial body. democracy is about more than a leader's approval rating. in closing, we should keep in mind that many in the hemisphere

want our help in building and strengthening democratic institutions and practices. such assistance is not a matter of imposing structures and values. each country should develop its own path. as partners in this experiment called the marcy, we can and should respond to those seeking to learn from others experience and not only from the north american experience. in my view, by supporting those who favor freedom and democracy, we contribute to the betterment all who live in this hemisphere. thank you. >> thank you. let me start by asking, taking off where you finished your statement, mr. fisk. what is the appropriate role for the united states, desirable role, and the concept of helping civil society further

promote democracy where it is not as vibrant or strengthen it where it is? if i would ask each of you, what are the top things the united states should do, what would your answer be? >> one effective instrument, and it speaks to the question of secretary jacobsen, his election observations. election observation is a set of procedures, instruments, that has developed over a period of time. it can be effected, it has been effective in a number of entities. some of it may be done by any organization in various countries, but some of it, which i would commend to both of you, is the work iri and ndi

have done over time. working with them has been very rewarding, and i believe he effective. let me give you a different example altogether, it may not work, but to think out loud. beginning some years ago, the state of sacatecas led the way to try to harness some of the remittances from mexican citizens living in the united states, not just help the individual family members, but to help to develop social objectives, community objectives, small civil society -- at the local level. it was developed at what is often called the free-for-one funding.

for every dollar that comes from a mexican indian i did say to a family in a local community, local and state and federal entities in mexican society's contribute $1. there's a question of whether some of that could be implemented or facilitated through features of charitable sides of the u.s. tax code, to facilitate and to stimulate those kinds of commitments with the ball, of resources would come not from the u.s. taxpayer, but from individual citizens who voluntarily make these efforts and from governments themselves. hibiscus called transitional civil society, but -- this is civild trancesitional society. >> it is important to avoid crude tends to promote regime change, and i am struck from

outside for exporting democracies. i am struck by a broad consensus that exist here today that that is not the way for, and i think that is good. i would say that a lot of this work falls not to the united states government, but to other institutions in american society, particularly foundations, ngo's. i think supporting media freedom, pressure groups, watchdogs throughout the hemisphere is absolutely vital, they do an important job, and the more of that work that is done, the better. i think senator rubio mentioned the idea of the indicted states supporting parliamentary to other more robust

democracies in latin america. that strikes me as an important thing, because peer pressure at the end of the day and taking the peers of venezuela, being the other latin american countries, is important. specifically, there is a specific event schedule next year, the president election in venezuela, that should be of supreme importance. election observation may be difficult. it can only be achieved through multilateral agreement. i'd would note that there has been no conclusive proof that the actual accounting of voting has not been accurate in venezuela. and it is important to mobilize

as a much pressure as possible to ensure that that vote is free and fair. >> the regime change -- surely you do not suggest that assistance to civil society to promote greater democracy, freedom of the press, right to organize, his regime change. >> of course, i do not think that is the case. in the past, some elements within venezuela tented unconstitutional regime change, and while they did not, there is no proof they got support from the administration here. they got support from some other sectors here. >> mr. fisk, you have had -- iri has had a robust cuba program for many years.

what do you think has worked -- what can we do in places like help civil society and help disseminate voices in and off the island? >> i believe the programs implemented, while they have had bumps in the road in implementation, have over time been able to overcome challenges presented by the cuban regime, specifically. in terms of continuing to make sure that the in the ngo world get information to the island, find opportunities to get cubans skills in terms of basic concept of democracies, and basic organizational skills -- in some cases where starting with very basics and some cases it is a

pen to paper. the fundamentals are there in terms of how it works. the problem we run into is the fact that the regime as a very effective security apparatus, and the other issue we have is when we talk about calling attention to things and people, and a lot of individuals make a very tough decision. a u.s. ngo can always get up and leave the place. in terms of the fundamentals i think it is there. we always seek opportunities for more, but it is a case where i think the committee from our perspective should be assured that there are things in motion and ways to get information, ways to get skills the people on the islands. >> thank you to the panel. here is what i would like to do,

make a brief statement. then get your questions -- impressions. you have governments and i use cuba as an example, that are not legitimate. they do not have the consent of the people they govern. the only reason they a system but they put you in jail, they torment your family, and if you do not agree with the government, they are eligible because they did -- they do not covered with the consent of the government. it is fair in my opinion where the united states should be. the word regime change is used. anywhere in the world that has such a government, the s should be on the side of the people. cuba is a prime example of that.

a second issue is nations that have democratic institutions, but leaders who are trying to other men -- to undermine them, and that is what i want to focus on. we are proud of our republic, but it has not been without challenges. it had a civil war over some of the issues that face our country. one of the things that makes us unique is the ability to take on difficult issues within the context of the republic. richard nixon resigned, but imagine if he had ordered the armory to march on the capital to prevent his impeachment. in my home state in 2000, we had a close election that decided the election of the presidency of the united states, but when the supreme court ruled, vice president gore moved on. it is far fetched forced to

think about, but it happens around the world, where the president orders the army into the street or the cancellation of the supreme court on how to roll. those institutions have allowed us overtime to solve a very otherntious issues that cove countries have had to fight wars over. you talked about the election in mexico, how the cameras cut to the president and how they cut to every party that had been in charge for every day, and how they broke out in singing the national anthem of mexico. imagine how mexico would be today if it did not have the democratic institutions fortified by these elections. here is our challenge. there are going to be elections,

and the person who wins may be somebody whose policies we do not like, and we may not like their rhetoric or things they have said in the past. they want an election. the challenge there for us is how would you advise on a foreign policy perspective that kinds of things we can do to separate, how do we separate those two between the fact it is not the fact we do not like he attends toies, undermine democratic institutions. not by rigging votes, but by intimidating but, not by creating a fair playing field. that is different from someone we did not things

like, but who is governing in an effective way. we should be against that, ultimately we have to deal with the whom are elected his policies we may not like at a given moment. >>, senator, that was a lucid exposition of the issues. it is important to stress the construction of robust democracies in latin america is a learning process for the societies themselves.

i think in the case of venezuela, i am sure all of us up or -- abhor the way institutions of the modesty had been weakened in venezuela. that has so far been done with the consent of the majority of the people. the narrative that the president has sold to the people have been as a result of outside interventions. we might consider that to be a fantasy. it has been quite effective. i think it is -- outside influence is important, but important at particular moments.

it is likely that much more impact at a moment when the society itself is changing its mind, it's political mind, and that process is under way in venezuela. it is not complete yet. it is starting in bolivia and in ecuador. nicaragua is a slightly different case, where for an opposition to win an election, you have to have a coherent and possible opposition, and i do not think that is a case in nicaragua. while one has to wage the democratic war through civil society, port the civil society institutions, one has to also pick one's battles.

>> one thing that has come out in your questions and comments is an important element in all of these key political issues that is very difficult to shake. it is statesmanship. mr. fisk refer to the statesmanship of a president, who accepted the decision of the constitutional court, and stepped down. if i knew more how we could fashion this, i would feel much more confident about answering your question, but i want to begin with a sense of humility that i cannot fully address it, because that element, statesmanship, is important.

on a couple of examples, the brazil 2002 presidential election, i could imagine there would be many people in the city of washington at that time who were very nervous, just as there were many brazilians at the time that lula might be elected. it worked because there was a willingness to give this political process a chance, to see how lula would government, and the great credit of brazilians and the first instance, but to many others, including the bush administration, i have no idea what your views were, this worked, very successfully. it really is one of the accomplishments of which resilience, and also the international community, should be proud of. as the question of thinking about perot today. i do not find myself in general

in sympathy with the president's select's view, certainly not the early version, but even mthe more current versions, but i would like to give him the same benefit of the doubt. it is worth remembering, when chavez first elected, he did not run on the platform that he has implemented. he was very much in opposition to the way to venezuela had been governed. he was challenging both political parties and long entrenched elites, but he did not articulate at the time he would be undertaking that kinds the policies that have undermined the media and

journalists in civil society. the real serious difficulty for a venezuelan opposition and for anybody else is the this chaez process has occurred very gradually. it was not a military coup. it was autocracy drop by drop, and it is much more difficult to respond to the gradual installation of autocratic practices, and we we have not done a very good job at supporting the democratic process. it is very hard to do when happens little step by little step. >> if the committee will indulge me in stepping out of my role and taking on some of the experiences, i think a number of us who have served in positions

at various times have struggled with exactly the question that you presented. if someone has an answer that is the definitive one, it would be useful to know. comment,up on jorge's president bush took the calculated risk to reach out to president-elect lula and then president lula, and it was more trust but verify. they had more in common and their national interest shared more than separated us, and that was to both their credit. in my view, they have continued that path, but it is more than a trust but verify circumstance. i would argue that mr. chavez had another agenda. this is one of those issues

that the anti-democrats in the hemisphere learned in the 1980's they could not shoot their way into power. they had to learn the democratic process is a without adopting the democratic ease those and internalizing it. it is a matter that we struggle with. whether we like his policies or not, president job as its president because he was elected -- president chavez was elected. in a democratic process, can people basically vote themselves into subjugation? there is no good policy response, but let me try this back to the chairman's question about the instruments. i think it is a matter which the united states both in terms of the executive branch, the president, and this institution, need to be very clear. there needs to be war clarity in terms of whether this country is

supporting smaller democrats. ambiguity works to the bench of those who are opposed to democracy or abusing democratic means -- promote their ultimate ends. in the end, u.s. civil society is a potent force. as has been reference before, there are a lot of fun on all engagements between private american citizens and private groups with counterparts in the hemisphere. there is a phenomenal interaction. when it comes to the political side, there is a small group that does this. i do not want to sound self- serving, but there is a very small community that does this in this country in terms of the our reach to civil society that strengthens them in terms of their ability to organize an advocate. it does not matter if it is education or water or gender equality, violence against women -- a number of things, but there

is a very small group that does that. espy the reality is that those who do this -- we have thunders, and those are predominately the united states government. this is just a reality we exist in. in terms of what the chairman and you have made comments to, it is a matter of making sure that that support continues to be there. it is the moral persuasion, and the very real reality on the ground. it is an important place for both of those elements to be. i am wearing two hats in some ways, but hopefully that is a somewhat coherent answer to your question. >> of you out of body experiences of less than five

minutes, but moving back and forth, i think it was very insightful. i want to pick up on something you said. part of what you said, mr. fiske, i believe that these engagements are very important. part of my concern, one of the reasons i have been promoting for several years now the social and economic development fund for the americas is because, what the people turned very often to the chavezes of the world? they turned to them because they are in deep economic straits. their governments have not responded to their hopes and dreams and aspirations. then someone comes along and promises the world and uses the rhetoric, and ultimately gets

elected and then uses their position from a position of power to transform institutions that keep them in power, and maybe they continue to do some populist but things, even though venezuela is doing worst in terms of its economy versus other parts of the hemisphere. it seems that one of the things that are national interest and our national security -- forget about being a good neighbor, which is a desirable goal as well. as part of our effort if we help strengthen the opportunities for sustainable development effort and education efforts in the hemisphere, we will give rise to a growing universe of citizens of the hemisphere who right now sit below the poverty level and obviously are in dire straits and therefore very susceptible to what ultimately ends up being an anti-democratic result.

hence your statement, is it right to go ahead and vote yourself into subjugation at the end of the day. seems to me this is in the interest of the united states as it relates to our overall international assistance. everything we talk about in this congress or many of the things we talk about, the only reason people leave their countries is dire economic straits or civil unrest. otherwise they will stay in their beautiful countries. so you want to stop the tide of undocumented immigration. how you create more sustainable development for people in the hemisphere? you want to ensure that there is not instability in the hemisphere in terms of security or that iran and china and others do not have a deeper foothold and they purport to

have. you then have a strengthened relationship in that respect. i hope we can work to create a connection here that says that the work of iri and ndi and some more rude -- robust efforts to create opportunities for a growing middle classes in the national interest and security of the united states. i would be remiss if i did not take the benefit of the expertise here. mexico is probably the country in the hemisphere that we are most entertaining -- intertwined with. that country has in the past five years been challenged by drug trafficking organizations. i looked at the freedom house report, the authoritarian challenge to democracy, where they drop mexico's political rating to partially free. considering the challenges, i

admire the president of the mexico's efforts to take on the narcotics cartels, probably more robustly than at any time in mexico's history. is that fair as an observation of mexico, and what to countries like mexico, that are fighting the narcotics challenge -- how to that balanced the effort to create security and at the same time make sure that their democratic institutions do not become an authoritarian in response to the security challenge? >> i have great admiration for president calderon and the extraordinary difficult challenges he faces and the difficult work he has been taking on. it is fair to say that if you or i were a journalist in mexico, we would feel intimidated, not

by the president of mexico or by his government's, either the mexican congress or the executive, but by the threat that if i as a journalist write a story, i could be shot. the personal experience of assassination and intimidation of journalists in mexico has become a very severe issue. similarly, you probably saw the newspaper from the border saying to criminal organizations, tell us what you want us to do. we will sensor ourselves. it is not just the actual acts of physical violence, but the realization an important element of the mass media that they cannot do the job they want to do, from which mexico would gain. it is one of those instances where i think -- you have seen

the example of journalists, at the level of a working journalist, it is true, they are less free than they were before. what is unusual about this is that this is not as a result of the actions of the national government. this is not venezuela, this is chavez.o job a one of the things i do find impressive is the sustained effort of the mexican government, not only to employ course against those who are committing crimes and assaulting people, but trying to train both military and police in the effective professional role of law enforcement and deployment of troops in ways

that mexican security forces had not in the past. paradoxically, as mexico's categorization has been dropped to partially free, the security forces are more likely to be respectful of human rights now than they were in the past. so i would give high marks to the role of the government as it faces this situation, while at the same time recognizing that yes, it is true that the experience of the ability to express freedom of the press, freedom of expression, has declined. >> i just want to -- first, the panel has been excellent. i wanted to briefly run of view of the region and see your perceptions. we are categorizing three different types of entities that we run into.

the first is tyranny by cuba. the government is not legitimate. the only reason is in charge in the country is because its people are oppressed. the u.s. position toward that should be that you are not legitimate, and if we have a chance, we will do everything we can to help your people bring about a change there are leaders trying to undermine the democratic institution. and those ever to put in place, whether committee, media, or intimidating opposition, we will criticize you for it and call you out for that. we will not interfere in internal affairs or support things that might undermine democratic institutions because we are not going to add or contribute to your problems, but we will not celebrate or ignore when you do things that undermine your democratic institutions. the challenge historically has been, what if those people are

pro-american, or undermining democracy? you have to have discipline in order to have credibility. the third is nations to have democratic institutions and respect them. maybe they make some weird alliances that we do not understand around the world and we criticize that, but they are freed, real, republican democracies. we should celebrate that. the benefit of that should be strong relationships with the united states and the ability to do business with them. we should celebrate and encourage this and show the region, we don't want to control your domestic and foreign policy. we would like to influence it, but ultimately we are committed to democratic institutions. we want to work with you on that and strengthen our ties. i don't of you have any impressions on that. >> before addressing that

question, could i add something to the question about mexico? i lived in mexico as a journalist for about four years in the early 1990's. when i lived there, at least for the first three years, not a single media outlet in mexico city was freed. i think there has been a big change. one should remember that context. it is certainly true that there are serious threats to the laws and liberties of journalists and many organizations in mexico today, but they tend to be concentrated in areas away from the capital. just in terms of the security effort and its implications for democracy, i do think it is crucial that mexico moves faster on building a serious police force because the

historic achievement of that mexican revolution was to have taken the army of context. in contrast to what was happening elsewhere, i think there is a danger that the longer the army is not involved in the front line of the crackdown against drug trafficking organizations, then the army risked becoming politicized and its reputation tarnished. we are starting to see signs of violence and revolution -- reminiscent of." revolution -- reminiscent of the revolution in mexico. the u.s. can help in terms of looking at a drugs and violence policy.

i think it is right that -- is a man who has ended-democratic antecedent, has arrived in power through democratic process. i think the united states can contribute to the circumstances being those of a strong underlying democracy by engaging with them. i am troubled by it -- i think there is finally a process of change going on in cuba.

i think the economic changes the government has announced, modest though they are, him then by all kinds of restrictions -- for the first time they involve changes that the regime will not be able to control. if one and three cubans is going to be working in self employment in an incipient private sector in a few years' time, then the fundamental contract that was established with people on the island would forgo their liberty and return for a series of the necessities of life being provided for by the state. that is gone. society will start changing very

rapidly. other countries are not going to be able to engage with that. as some point the u.s. will have to think about in what way it could constructively engage with that in order to achieve the outcome everybody wants of a democratic system. >> just to comment on your characterization, i think it is apt and it can give us clarity on a couple of points. it is probably easier and more effective for the u.s. government's to work with and support countries that already have constitutional democratic regimes than to deal with those that understandably we worry about, but it is harder to address. one connection could well be to the idea that senator menendez

mentioned a moment ago, his longstanding interest in a fund for social and economic development. the most successful anti-poverty programs, certainly in latin america but not just there, has been economic growth, and to be able to facilitate the kinds of economic growth that will bring more people into the work force is an idea on which we ought to focus firmly. the second observation we have learned, which is why the word socialism poured into the name of this endeavour, is that economic growth alone is probably not as effective as economic growth would sensible, well targeted social policies. michael mentioned conditional cash transfers very to give you different context, one of the reasons for the election of the president of peru, for reasons that remain difficult for me to

understand, neither of the two most recent presidents in peru chose to use the very impressive economic growth approval of the last decade or so to invest in social policies, even when these proposals were presented to them by their advisers. the notion of understanding the utility of economic growth and smart social policies, which otherwise american countries have undertaken, and to focus on supporting those who are doing good things, i think it is a good road ahead. >> senator, i would agree with your typology. i would add that you also have to remember there is going to be a government to government dynamic and a civil society dynamic. i would encourage this subcommittee to keep in mind that we tend to focus on that tyrannies and the democratic countries at risk. we have to remember, there are

still a lot of countries that we would characterize as fully free, but they are still struggling. they have a number of issues on the political and socio-economic sides. it is understandable that week focus on venezuela and cuba, but we also have to focus on what mollah and other countries -- on and others ♪ countries. the instruments are there to help people help themselves. ultimately the peoples of those countries have to be the reactors and make the decisions, but again, the united states has a lot we can offer beyond trade agreements and rhetoric. there are instruments here. we have to have the political will to deploy that, and in the end, that becomes the ultimate question. >> thank you all very much. you have been very generous. has been very insightful.

i think you have helped the committee's work going forward. we appreciate your testimony. the record will remain open for three days for members to ask questions. if you receive them, we ask you to respond as expeditiously as possible. with that, this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

how th>> looking ahead to our p- time programming tonight, at 8 eastern will feature henry kissinger taking part in the munk debates. the topic is china in the 21st century. that gets underway at 8:00 p.m. eastern right here on c-span. honor companion network, a prime-time programming begins with the review of federal relations from the brookings institution's. that is at 8:00 p.m. eastern.

>> saturday on "washington journal," of wall street journal reporter on the u.s. economy and recent job numbers. then reaction to president obama recently announced plan to withdraw over 30,000 troops from this -- from afghanistan by september 2012. then, talk about a recent poll taken by high school students on financial service providers. "washington journal," live saturday at 7:00 a.m. eastern, here on c-span. >> tune in to c-span is independence day. analysts discuss if the united states can remain united. >> at the political level, we are more divided. if you look at the partisan polarization since the civil war. >> religion, violence, and the

death penalty, and then later, nixon white house insiders discuss his foreign-policy. that is monday, july 4, beginning at t it -- 10:00 a.m. eastern on c-span. >> this fourth of july three-day weekend, on american history t b, we will visit the smithsonian museum of natural history to learn about a 19th century u.s. government expedition to circumnavigate the globe, and their treasure, 40 tons of specimens which became the foundation of the smithsonian institution. former first lady laura bush on her time in the white house, planning her husband's presidential library, and her memoir, "spoken from heart." get the complete weekend schedule at c-span.org/history.

>> republican perspective now on the national debt and federal deficit. the executive director of the club for groat's join us on today's "washington journal" for about 45 minutes. is david keating, executive director of the club for growth, which is what? guest: it's a group advocating policies that help create economic growth, things like limited government, economic freedom, low taxes, free tra, low inflation. host: you probably saw we've been having a pretty robust discussion with the audience this morning about the state of the american dream. how would you assess it? guest: i would say a lot of people think things are looking like a nightmare for their family. host: what do you think? guest: look, i think there are a lot of positives in this country. i don't think, for all the flaws we have, we're the greatest country in the world. we have a great mix of people who have come to this country. almost everyone that's here has come voluntarily, and i think that's the one thing that gives

us real strength. we have a good rule of law generally in the united states. we have pretty soundovernment overall compared to the rest of the world, so there are a huge number of posives here. and we have a lot more freedom than around the world so i think the real pluses of america are the people, t freedoms that we have, and the ability to innovate, and that's what has made america great for so long. host: as you know, washington is tied up in knots this summer over the looming debt ceiling deadline. guest: right. host: i saw that article from "usa today." onof many you see raising the question of what would happen if we reached the debt ceing and no deal is reached. would you talk about how significant this debt ceiling question is and why o why not. guest: actually, i think it's quite a puzzling question. it's probably the most important legislative issue this congress will face during the two years. it will probably set up the debate abouthich direction the country wants to go in in

the 2012 elections. so i think it's going to be really fundamental. the basic question is, are we going to continue on the path that we're on. everyone recognizes there are a couple of key problems. one is our economy is not growing fast enough, so we need to pursue policies to expand the economy. and second, all the budget projections by the c.b.o. outside experts show that we have past programs that are unsustainable in the long run, and if we don't do something about this, the country eventually will weaned up in a situation like greece, where we won't be able to afford the debts that we're racking up. it's a very important question. they're not going to solve everything as pa of this debt ceiling debe, but they can set up some parameters to put the country in the right direction or not. host: we've heard